Marketing for Customer Value

MODULE 1: Introduction to marketing 12 HOURS

Introduction: Concept, nature, scope and importance of marketing; Marketing concept and its evolution;
Marketing mix; Strategic marketing planning – an overview. Market Analysis and Selection: Marketing
environment – macro and micro components and their impact on marketing decisions. concept of market
segmentation, Bases for market segmentation, Types of market segmentation, Effective segmentation
criteria, Evaluating & Selecting, Target Markets, Concept of Target Market, Positioning and differentiation
strategies, Concept of positioning.

MODULE 2: Product Decisions: 8 HOURS

Concept of a product; Classification of products; Major product decisions; Product line and product mix;
Branding; Packaging and labeling; Product life cycle – strategic implications; New product development and
consumer adoption process. Pricing Decisions: Factors affecting price determination; Pricing policies and
strategies; Discounts and rebates.

MODULE 3: Distribution Channels: 8 HOURS

Distribution Channels and Physical Distribution Decisions: Nature, functions, and types of distribution
channels; Distribution channel intermediaries; Channel management decisions; Retailing and wholesaling.

MODULE 4: Promotion Decisions 12 HOURS

Communication Process; Promotion mix – advertising, personal selling, sales promotion, publicity and
public relations; Determining advertising budget; Copy designing and testing; Media selection; Advertising
effectiveness; Sales promotion – tools and techniques.

MODULE 5: Marketing Research 8 HOURS

Meaning and scope of marketing research; Marketing research process. Marketing Organization and Control:
Organizing and controlling marketing operations

MODULE 6: Issues and Developments in Marketing 12 HOURS

Social, ethical and legal aspects of marketing; Marketing of services; International marketing; Green
marketing; Cyber marketing; Relationship marketing and other developments of marketing.
 MODULE 1

Introduction to marketing

Marketing is the process of identifying, anticipating, and satisfying customer needs and wants through the
creation, promotion, and distribution of products and services. The ultimate goal of marketing is to build
long-term relationships between businesses and their customers.

Marketing can be defined as an organization’s efforts to communicate its values and benefits to
customers, partners and other parties involved.

Marketing involves a range of activities, including market research, product development, pricing,
advertising, promotion, sales, and distribution. It also involves identifying target markets and developing
strategies to reach and communicate with those markets. Effective marketing requires a deep understanding
of consumer behaviour, market trends, and the competitive landscape. It also involves continuous
monitoring and analysis of marketing campaigns and their impact on business performance.

Marketing is essential for any business to succeed, as it helps businesses to differentiate themselves from
their competitors, attract and retain customers, and ultimately drive revenue and profitability.

Marketing is a five-step process that enables a business to generate customer value and is as follows:

1. Understanding the marketplace and the customer's wants and needs,

2. Designing a marketing strategy that is customer-driven,

3. Developing a marketing program that will deliver superior customer value,

4. Building profitable relationships with customers, and

5. Creating profits and customer equity by capturing value from customers.

Concept of Marketing

 The Production Concept: This concept is the oldest of the concepts in business. It holds that
consumers will prefer products that are widely available and inexpensive. Managers focusing on this
concept concentrate on achieving high production efficiency, low costs, and mass distribution. They
assume that consumers are primarily interested in product availability and low prices. This
orientation makes sense in developing countries, where consumers are more interested in obtaining
the product than in its features.
  The Product Concept: This orientation holds that consumers will favour those products that offer
the most quality, performance, or innovative features. Managers focusing on this concept
concentrate on making superior products and improving them over time. They assume that buyers
admire well-made products and can appraise quality and performance. However, these managers are
sometimes caught up in a love affair with their product and do not realize what the market
needs. Management might commit the “better-mousetrap” fallacy, believing that a better mousetrap
will lead people to beat a path to its door.
 The Selling Concept: This is another common business orientation. It holds that consumers and
businesses, if left alone, will ordinarily not buy enough of the selling company’s products. The
organization must, therefore, undertake an aggressive selling and promotion effort. This concept
assumes that consumers typically sho9w buyi8ng inertia or resistance and must be coaxed into
buying. It also assumes that the company has a whole battery of effective selling and promotional
tools to stimulate more buying. Most firms practice the selling concept when they have
overcapacity. Their aim is to sell what they make rather than make what the market wants.
 The Marketing Concept: This is a business philosophy that challenges the above three business
orientations. Its central tenets crystallized in the 1950s. It holds that the key to achieving its
organizational goals (goals of the selling company) consists of the company being more effective
than competitors in creating, delivering, and communicating customer value to its selected target
customers. The marketing concept rests on four pillars: target market, customer needs, integrated
marketing and profitability.
 The Societal Marketing Concept: This concept holds that the organization’s task is to determine
the needs, wants, and interests of target markets and to deliver the desired satisfactions more
effectively and efficiently than competitors (this is the original Marketing Concept). Additionally, it
holds that this all must be done in a way that preserves or enhances the consumer’s and the society’s
well-being.

Nature, Scope and Importance of Marketing

Nature of Marketing: Marketing is a dynamic process that involves the exchange of goods and services
between buyers and sellers. It is a multifaceted discipline that encompasses a broad range of activities,
including market research, product development, branding, advertising, sales, and customer service.
Marketing is also a customer-focused process, which means that it seeks to understand and satisfy the needs
and wants of customers through the creation, promotion, distribution, and pricing of products and services.

1. Managerial function: Marketing is identifying and satisfying consumers needs and wants profitably.
It requires managerial skills to identify needs with the help of many techniques, research and satisfy
 them effectively by proper planning and implementation. Therefore, Marketing is a managerial
function.
2. Human activity: As we saw in above point, marketing is a need/ want satisfying function profitably,
it requires organizing skills, professional knowledge, resource optimization and leadership ability to
efficiently operating. And this requires competent, qualified, skilled human resource, therefore
marketing is a human activity.
3. Economic function: Effective Marketing leads to economic development in the country. Marketers
optimize the opportunities and provide needs satisfying products and services to consumer for a
price or fees. Economic development leads to growth in employment. Thus, it is a economic
function too.
4. Marketing is both Art & science: Marketing is a science, as it collects data about consumers,
analyzing them with many techniques, forecasting, testing the results of analyzing, etc.
Marketing is also an art, as leading workforce, creativity, innovation, effective promotion ideas,
consumer relations are not related to science, but related to manager's ability, his/ her art.
5. Consumer centric: Modern marketing is consumer centric in nature. All strategies and activities in
marketing are directed towards the consumer. Organizations are giving importance to concepts such
as customer satisfaction, relationship marketing, customer experience.
6. Market research: Successfully conducting Marketing activities require research about consumers,
their characteristics, needs, thinking. Nowadays, environment is changing so quickly, just like in a
snap. So, companies should keep doing research about business environment to survive & be
successful in this ever-changing environment.
7. Goal oriented: Marketing is a goal-oriented process. Organizations try to satisfy consumer needs by
offering them products and services in exchange of a amount to earn profit. Every organization wants
to be successful in long term, and effective marketing helps to achieve the goals.
8. Dynamic process: Marketing activities are affected by many environmental factors such as
consumer, supplier, economy, political, technological, social etc. All these factors keep change from
time to time. Marketers should evolve with these changes. So, Marketing is a dynamic process

Scope of Marketing: The scope of marketing is vast and includes all activities that are related to the
creation, promotion, distribution, and pricing of products and services. This includes market research,
product development, branding, advertising, sales, and customer service. Marketing is also concerned with
understanding the needs and wants of customers, developing strategies to meet those needs, and building
strong relationships with customers to generate revenue and profits for the organization. The scope of
marketing also extends beyond the organization, as it involves understanding and responding to the external
environment, including competitors, suppliers, and other stakeholders.
 1. Market Research: Market research is a systematic collection, analyzing, interpreting data about
market components such as consumers, competitors, price prevailing, opportunities, threats etc.
2. Planning about product/service design: It consists of planning about how we are going to satisfy
consumers. Design of product will be decided in this plan. Its materials, size, features etc. are vital
factors while performing in the market.
3. Organizing Resources: This function is about gathering all resources in a proper structure to
perform all activities. There are resources such as financial resource, Material resource, Human
resource, Physical resource.
4. Packaging & labelling: Packaging and labelling is vital for the product to be safe, more attractive,
able to appeal, informative to customers.
5. Branding: A brand is a name, sign, logo, symbol, mark etc. to differentiate the product from
competitors and other related ones in the market. An effective branding strategy will lead to more
customer attraction, increased sales, enhanced image, customer loyalty etc.
6. Pricing of product: Price is the exchange value which the marketer gets against his offerings. Proper
research should be done before taking pricing decisions.
7. Promotion of product: Promotion consists of communication between company and consumers
regarding the products. The objective is to spread awareness of product and to persuade the people
to buy their offering. Nowadays, online promotion is growing in a rapid speed.
8. Selling & distribution: After all the hard work, selling the product is most vital task, isn't it? It gives
the company earnings and profit for which they are putting efforts.
9. After sales services & customer relations: This point is important for customer retention.
Increasing new customers is tougher task than retaining present customers, it leads to customer
loyalty, which indirectly attract perspectives to actual customers.

Importance of Marketing: Marketing is critical to the success of any organization, as it enables companies
to understand and meet the needs and wants of customers. By developing effective marketing strategies,
organizations can create value for customers, build strong relationships with them, and generate revenue and
profits for the organization. Marketing also plays a vital role in creating and maintaining brand equity, which
is the value that a brand adds to a product or service. In addition, marketing is essential for organizations to
remain competitive in the marketplace, as it enables them to identify and respond to changing customer
needs and market trends. Finally, marketing can also have a positive impact on society by promoting socially
beneficial behaviours and products, such as healthier lifestyles, sustainable practices, and philanthropic
initiatives.
 1. Need/ Want satisfaction: Marketing is all about identifying consumer's needs and wants either
unfilled or new, and utilizing those opportunities and satisfying them effectively and profitably.
2. Economic growth: Marketing leads to economic growth as it creates business opportunities which
provides want satisfying products or services through distribution system. All these activities help in
continue flow of money in the economy.
3. Generates employment: As we saw in above point, marketing leads to economic growth, this
continues growth creates new business opportunities, which leads to growth in employment
opportunities.
4. Enhance standard of living: We saw above marketing leads to economic growth and generates
employment, so, it improves the standard of living of all those people who earn from marketing
activities.
5. Attain Goals: Every organization have some goals to achieve in long term. Effective marketing
strategy aids the management to earn good amount of profit continuously, which leads to attaining
long term goals.
6. Development of new products: Marketing is a continuous activity, and to be successful in long
term, companies have to continuously modify their products, bring new ideas & products.
7. Enhanced product quality: Modern marketing tries to get customer feedback about the product,
which helps companies to regularly monitor product performance and its quality.

Marketing concept and its evolution

The marketing concept is a business philosophy that emerged in the mid-20th century and has since become
the dominant approach to marketing. It is based on the idea that businesses should focus on understanding
and satisfying the needs and wants of customers through the creation, promotion, distribution, and pricing of
products and services. The marketing concept represents a shift from earlier business philosophies, which
focused more on production and sales than on the needs and wants of customers.

The evolution of the marketing concept can be traced back to the early 20th century, when businesses began
to realize the importance of understanding customer needs and preferences. This led to the development of
market research techniques, which enabled companies to gather data on customer behaviour and preferences.
The first major academic work on marketing, "The Theory of the Leisure Class" by Thorstein Veblen, was
published in 1899, but it wasn't until the 1950s and 1960s that the marketing concept began to gain
widespread acceptance.

One of the key figures in the development of the marketing concept was Theodore Levitt, who argued that
businesses should focus on customer needs and wants rather than on product features. Levitt's influential
article, "Marketing Myopia," published in the Harvard Business Review in 1960, challenged businesses to
define their markets in terms of customer needs and wants rather than product categories.

Another influential figure in the evolution of the marketing concept was Philip Kotler, who helped to
popularize the marketing concept in his influential textbook, "Marketing Management," first published in
1967. Kotler argued that the marketing concept involves understanding customer needs, developing products
that meet those needs, communicating the value of those products to customers, and building strong
relationships with customers to create long-term value.

Today, the marketing concept is the dominant approach to marketing, and it has evolved to encompass a
wide range of activities, including market research, product development, branding, advertising, sales, and
customer service. The concept continues to evolve as businesses adapt to changing customer needs and
market trends, and as new technologies and communication channels emerge.

While there are different schools of marketing thought in terms of the origin of the discipline and its various
phases, the dawn of the 20th century is a good starting point for our purposes

Over the past 12 decades, marketing has gone from the simple act of informing potential consumers about
the existence of a certain product to a complex web of interactions that take place in person, through print,
over the airwaves and on social media.

Marketing evolution refers to the distinct phases that businesses have gone through as they continued to seek
new and innovative ways to achieve, maintain and increase revenue through customer sales and partnerships.
Since the 1900s, a variety of different strategies have been employed as various industries created and
refined their marketing approaches.

When Did the Marketing Discipline Begin?

The answer to this question is fairly nuanced. To get a rough sense of the origins of marketing, let’s turn to
the Online Etymology Dictionary. The authors trace this term back to the 1560s, when it was used to
describe “buying and selling, [the] act of transacting business in a market.” That’s a pretty literal definition,
but it’s a good reminder that prior to the creation of marketing concepts, “marketing” still existed. It was just
a pretty straightforward activity.

According to our dictionary, the first cited use of the word “marketing” in its modern business sense — the
“process of moving goods from producer to consumer with [an] emphasis on advertising and sales” —
comes from 1897. While it took some time for the field to move from a product-centric approach to what we
understand as a marketing orientation today, the roots of this discipline go back to the turn of the 20th
century.
Marketing mix

The marketing mix, also known as the 4Ps, is a framework for developing a marketing strategy that takes
into account the key elements of product, price, promotion, and place (distribution). These four elements are
often called the marketing mix because they can be combined in different ways to create a successful
marketing strategy.

1. Product: The product element of the marketing mix refers to the goods or services that a company
offers to customers. This includes the design, features, packaging, and branding of the product, as
well as any services that accompany it.
2. Price: The price element of the marketing mix refers to the amount that customers are charged for
the product or service. This includes the actual price, as well as any discounts, promotions, or
payment terms that are offered.
3. Promotion: The promotion element of the marketing mix refers to the ways in which a company
communicates with customers to promote its products or services. This includes advertising, sales
promotions, public relations, and personal selling.
4. Place (Distribution): The place element of the marketing mix refers to the ways in which a company
distributes its products or services to customers. This includes the channels of distribution (e.g. direct
sales, retail, e-commerce), as well as the locations where the product or service is available.
By carefully considering each element of the marketing mix, businesses can create a strategy that effectively
meets the needs of customers while achieving organizational goals. The marketing mix can also be adapted
over time as customer needs and market conditions change, allowing businesses to remain competitive and
meet evolving customer needs.

The 4P’s v/s the 7P’s

The 4Ps marketing mix was designed at a time when businesses were more likely to sell products, rather
than services. The 4 Ps represented an early focus on product marketing, when the role of customer service
in helping brand development wasn't so well known.

Over time, Booms and Pitner added three extended ‘service mix P’s': Participants, Physical evidence, and
Processes. Later 'Participants' was renamed as 'People' - the marketing mix covering marketers, customer
service reps, recruitment, culture, training and remuneration.

Today, it's recommended that the full 7 elements of the marketing mix are considered when reviewing
competitive strategies - across product, customer service and more.

The 7Ps helps companies to review and define key issues that affect the marketing of its products and
services. A popular marketing model, the marketing mix is can also be referred to as the 7Ps framework for
the digital marketing mix.

These additional P’s are:

 1. People: This refers to the personnel who are involved in creating and delivering the product or
service, including customer service representatives, salespeople, and other employees. The quality of
interactions between customers and personnel can have a significant impact on customer satisfaction
and loyalty.
2. Process: This refers to the processes and systems involved in delivering the product or service,
including the ordering process, payment process, and delivery process. Efficient and effective
processes can enhance customer satisfaction and reduce costs.
3. Physical Evidence: This refers to the tangible and intangible elements that communicate the value of
the product or service to the customer, including the physical environment, packaging, branding, and
other visual or sensory cues. Physical evidence can play a key role in shaping customer perceptions
and influencing purchasing decisions.
By taking into account all seven elements of the marketing mix, businesses can create a comprehensive and
effective marketing strategy that addresses all aspects of the customer experience. This approach can help
businesses build strong customer relationships, differentiate themselves from competitors, and achieve long-
term success.

Strategic marketing planning – an overview

Strategic marketing planning is the process of developing and implementing a comprehensive marketing
strategy to achieve the goals of a business. The purpose of strategic marketing planning is to align the
marketing efforts of a business with its overall strategic goals and objectives.

The process of strategic marketing planning typically involves the following steps:

1. Situation Analysis: This involves conducting an assessment of the internal and external environment
of the business, including analysis of the market, competition, customer behavior, and trends.
2. Target Market Selection: This involves identifying and selecting the most attractive target markets
based on the analysis of the situation.
3. Objectives: This involves setting specific, measurable, achievable, relevant, and time-bound
marketing objectives for the business, aligned with the overall strategic objectives of the business.
 4. Marketing Mix: This involves developing and implementing an appropriate marketing mix that
includes product, price, promotion, and place/distribution strategies, as well as the additional
elements of people, process, and physical evidence.
5. Implementation: This involves executing the marketing plan and monitoring progress against the
objectives, making necessary adjustments as needed.
6. Evaluation: This involves evaluating the effectiveness of the marketing plan and the return on
investment (ROI) achieved, identifying areas for improvement and making necessary adjustments for
future planning cycles.
The benefits of strategic marketing planning include a clear understanding of the market, identification of
competitive advantages, targeted messaging to customers, effective allocation of resources, and increased
return on investment. It is a continuous process that requires regular review and adjustment to ensure that the
marketing strategy remains aligned with the overall strategic goals of the business.

Market Analysis and Selection

Market analysis and selection are critical components of strategic marketing planning. Market analysis
involves assessing the external and internal factors that impact a business's ability to succeed in a particular
market. Market selection involves identifying the most attractive markets based on the analysis.

The following are the key steps involved in market analysis and selection:

1. Define the Market: The first step is to define the market. This involves identifying the specific
product or service and the geographic area or demographic group that the business is targeting.
2. Analyze the Market: Once the market is defined, the next step is to conduct a market analysis. This
involves assessing the external factors that impact the market, such as economic conditions,
regulatory environment, competitive landscape, and consumer behavior.
3. Identify Target Customers: Based on the market analysis, the next step is to identify the target
customers. This involves assessing the characteristics, needs, and preferences of the potential
customers to determine the most effective marketing strategies.
4. Assess Competitive Environment: Another important aspect of market analysis is assessing the
competitive environment. This involves identifying the key competitors and their strengths and
weaknesses, as well as assessing the competitive landscape to determine opportunities and threats.
5. Evaluate Internal Factors: Finally, market analysis should also include an assessment of internal
factors that impact the business's ability to compete in the market. This includes an assessment of the
company's strengths, weaknesses, resources, and capabilities.
Once the market analysis is complete, the next step is to select the most attractive markets for the business to
target. This involves assessing the potential for growth, profitability, and competition in each market and
selecting those that offer the greatest potential for success. Overall, market analysis and selection are critical
components of strategic marketing planning that enable businesses to develop a targeted and effective
marketing strategy that aligns with their overall business objectives.
Marketing environment – macro and micro components and their impact on marketing decisions

The marketing environment refers to the external factors and forces that impact a business's ability to
succeed in the marketplace. The marketing environment can be divided into two categories: macro-
environment and micro-environment.

1. Macro-environment: The macro-environment refers to the broad social, economic, political, and
technological factors that impact a business's ability to operate and compete in the market. The
macro-environment includes factors such as:

 Demographic: This includes factors such as age, gender, income, education, and lifestyle.
 Economic: This includes factors such as inflation, interest rates, and economic growth.
 Political/Legal: This includes factors such as laws, regulations, and political stability.
 Technological: This includes factors such as advancements in technology and the pace of
innovation.
 Sociocultural: This includes factors such as social norms, values, and attitudes.

The impact of macro-environmental factors on marketing decisions is significant. For example, changes in
the economic environment can impact a business's pricing strategy, while changes in technology can impact
a business's distribution and promotion strategies.

2. Micro-environment: The micro-environment refers to the specific actors and forces that impact a
business's ability to compete in the market. The micro-environment includes factors such as:

 Customers: This includes factors such as customer preferences, needs, and behaviours.
 Suppliers: This includes factors such as the availability and cost of raw materials and other inputs.
 Competitors: This includes factors such as the intensity of competition, market share, and pricing
strategies of competitors.
 Intermediaries: This includes factors such as distributors, wholesalers, and retailers that help to
facilitate the distribution and sale of products or services.
The impact of micro-environmental factors on marketing decisions is also significant. For example,
understanding customer needs and preferences is essential for developing effective product, pricing, and
promotion strategies, while managing relationships with suppliers and intermediaries is critical for ensuring
a reliable supply chain and effective distribution.

In conclusion, the marketing environment is complex and multifaceted, and it impacts marketing decisions
significantly. Businesses need to continually monitor and adapt to the macro and micro-environmental
factors to remain competitive and achieve their marketing objectives.
Concept of Market Segmentation

Market segmentation is the process of dividing a large and heterogeneous market into smaller groups of
consumers who have similar needs, wants, or characteristics. The goal of market segmentation is to identify
specific groups of customers with distinct needs and preferences and develop targeted marketing strategies
for each group. By doing so, companies can create more effective marketing campaigns that resonate with
specific customer groups and generate higher sales and profits.

There are several ways to segment a market, including:

1. Demographic segmentation: Dividing the market based on characteristics such as age, gender,
income, education, family size, and occupation.
2. Geographic segmentation: Dividing the market based on geographic location, such as country,
region, city, or climate.
3. Psychographic segmentation: Dividing the market based on personality, values, interests, and
lifestyles.
4. Behavioural segmentation: Dividing the market based on consumer behaviour, such as product
usage, brand loyalty, and purchase history.
Once the market is segmented, companies can develop targeted marketing strategies for each segment. This
may involve creating different marketing messages, using different communication channels, and offering
different products or services to meet the specific needs of each segment.

Market segmentation is essential for businesses because it allows them to focus their resources on the most
profitable customer groups, improve their marketing effectiveness, and gain a competitive advantage. By
understanding the unique needs and preferences of different customer segments, companies can tailor their
products, services, and marketing efforts to meet those needs and ultimately drive growth and profitability.

Bases for market segmentation (Types)

1. Demographic segmentation: This involves dividing the market based on characteristics such as age,
gender, income, education, family size, and occupation.
2. Geographic segmentation: This involves dividing the market based on geographic location, such as
country, region, city, or climate.
3. Psychographic segmentation: This involves dividing the market based on personality, values,
interests, and lifestyles.
4. Behavioural segmentation: This involves dividing the market based on consumer behavior, such as
product usage, brand loyalty, and purchase history.
 5. Benefit segmentation: This involves dividing the market based on the benefits that customers seek
from a product or service. For example, some customers may be looking for convenience, while
others may be looking for luxury or affordability.
6. Occasion segmentation: This involves dividing the market based on specific occasions or events,
such as holidays, seasons, or life events.
7. Usage rate segmentation: This involves dividing the market based on the frequency and amount of
product usage. For example, some customers may use a product every day, while others may use it
only occasionally.
By segmenting the market based on these different criteria, businesses can create targeted marketing
campaigns that appeal to specific customer segments. This helps businesses to improve their marketing
effectiveness, gain a competitive advantage, and ultimately drive growth and profitability.

Effective segmentation criteria

Effective segmentation criteria are the characteristics that allow a company to identify and target profitable
customer groups with specific needs and preferences. Some of the most effective segmentation criteria
include:

1. Measurability: The segmentation criteria should be measurable so that the company can quantify the
size and characteristics of each segment.
2. Accessibility: The company should be able to reach and communicate with the target segments
through effective marketing channels.
3. Substantiality: The segmentation criteria should be significant enough to justify the cost of
developing and implementing targeted marketing strategies.
4. Homogeneity: The customers within each segment should have similar needs and preferences, so
that the company can develop effective marketing strategies that appeal to the group as a whole.
5. Responsiveness: The target segments should respond differently to different marketing strategies,
allowing the company to create effective campaigns that generate a response from the group.
6. Profitability: The target segments should be profitable and offer a high potential return on
investment for the company.
By using these effective segmentation criteria, companies can identify and target specific customer groups
with customized marketing strategies that meet their unique needs and preferences. This can help companies
to increase sales, improve customer loyalty, and ultimately drive growth and profitability.

Evaluating & Selecting Market Segments

Evaluating and selecting a market segment involves assessing the potential of each segment in terms of its
attractiveness and fit with the company's capabilities and objectives. This involves the following steps:

1. Market analysis: The first step is to conduct a thorough market analysis to identify potential market
segments. This involves gathering data on customer needs, preferences, behaviour, and
demographics.
2. Segment attractiveness: The next step is to evaluate each potential segment based on its size,
growth potential, profitability, and competition. The most attractive segments are those that are large,
growing, profitable, and have low competition.
 3. Company fit: The company should also assess its capabilities and resources to determine if it can
effectively compete in the selected segments. The company should have the necessary resources and
expertise to meet the needs and preferences of the target customers.
4. Selecting the target segment: Based on the evaluation, the company should select one or more
target segments that offer the greatest potential for success. The company should focus its resources
on these segments to develop customized marketing strategies and product offerings that meet the
specific needs and preferences of the target customers.
5. Developing a marketing mix: Once the target segment is selected, the company should develop a
marketing mix that includes product, price, promotion, and distribution strategies that are tailored to
the needs and preferences of the target customers.
6. Monitoring and evaluating: Finally, the company should continuously monitor and evaluate the
performance of the selected segment and adjust its marketing mix as needed to improve effectiveness
and profitability.
By effectively evaluating and selecting market segments, companies can develop customized marketing
strategies that meet the unique needs and preferences of target customers, increase sales, and drive growth
and profitability.

Concept of Target Market

Target market refers to a specific group of customers that a company aims to reach with its marketing efforts
and product offerings. A target market can be defined based on various factors, such as demographic
characteristics, geographic location, psychographic traits, or behavioural patterns. The idea behind targeting
a specific market is to create a more effective marketing strategy by tailoring the company's products and
marketing messages to the specific needs and preferences of that group of customers.

By focusing on a specific target market, a company can:

1. Better understand its customers: By targeting a specific group of customers, a company can gain a
better understanding of their needs, preferences, and behaviour.
2. Develop customized marketing strategies: By tailoring marketing messages and product offerings
to the specific needs and preferences of the target market, a company can create more effective
marketing strategies that resonate with the target customers.
3. Increase marketing efficiency: By targeting a specific market, a company can avoid wasting
resources on customers who are not likely to be interested in its products, and instead focus its
resources on the most promising customers.
4. Improve customer loyalty: By providing products and services that are tailored to the needs and
preferences of the target market, a company can build stronger relationships with its customers and
increase customer loyalty.
Overall, targeting a specific market can help companies to improve the effectiveness of their marketing
efforts, increase sales, and drive growth and profitability.

Target Markets

Target markets are specific groups of customers that a company chooses to focus its marketing efforts and
product offerings on. Target markets can be defined based on various factors such as age, gender, income,
geographic location, interests, and behaviour.
Here are some examples of target markets:

1. Age-based target markets: Companies may target specific age groups such as teenagers,
millennials, or baby boomers with products and marketing messages that appeal to their unique needs
and preferences.
2. Gender-based target markets: Companies may target men or women with products and marketing
messages that appeal to their specific gender-related interests and needs.
3. Income-based target markets: Companies may target customers with specific income levels, such
as high-income earners or low-income earners, with products and marketing messages that fit their
financial circumstances.
4. Geographic-based target markets: Companies may target customers in specific geographic
locations, such as urban or rural areas, or customers in specific countries or regions.
5. Interest-based target markets: Companies may target customers with specific interests or hobbies,
such as sports enthusiasts, music lovers, or pet owners, with products and marketing messages that
cater to their interests.
By targeting specific markets, companies can create more effective marketing strategies that resonate with
the needs and preferences of their target customers, and in turn, increase customer satisfaction, loyalty, and
ultimately, drive sales and profitability.

Concept of positioning.

Positioning is the process of creating a unique identity for a brand or product in the minds of its target
customers. It involves developing a marketing strategy that communicates the unique value proposition of
the brand or product and differentiates it from competitors in the market.

The goal of positioning is to create a distinctive and memorable impression of the brand or product that
resonates with the target audience and establishes a competitive advantage in the market. This can be
achieved through various marketing techniques, such as advertising, branding, pricing, packaging, and
distribution.

Effective positioning requires a deep understanding of the target audience and their needs, preferences, and
behaviour. It also involves a thorough analysis of the competition and the market trends to identify
opportunities and areas where the brand or product can differentiate itself and stand out.

The positioning strategy should be communicated consistently across all marketing channels to build brand
recognition and increase customer loyalty. It should also be reviewed regularly to ensure that it remains
relevant and effective in the face of changing market conditions and customer needs.

Overall, effective positioning can help a brand or product to establish a strong market presence, increase
customer loyalty, and drive growth and profitability.

Positioning and differentiation strategies

Positioning and differentiation strategies are closely related marketing concepts that help companies
establish a unique identity for their brand or product in the minds of customers.

Positioning is the process of creating a unique identity for a brand or product in the minds of its target
customers. It involves developing a marketing strategy that communicates the unique value proposition of
the brand or product and differentiates it from competitors in the market. The goal of positioning is to create
a distinctive and memorable impression of the brand or product that resonates with the target audience and
establishes a competitive advantage in the market.

Differentiation, on the other hand, refers to the process of creating a unique product or service that stands out
from competitors. This can be achieved by offering unique features, benefits, or qualities that are not
available from other products in the market. The goal of differentiation is to create a competitive advantage
that makes the product more appealing to customers and encourages them to choose it over competing
products.

Effective positioning and differentiation strategies can help companies to establish a strong market presence,
increase customer loyalty, and drive growth and profitability. Companies can use a variety of marketing
techniques to position and differentiate their products, such as advertising, branding, pricing, packaging, and
distribution.

To develop an effective positioning and differentiation strategy, companies should:

1. Conduct market research to understand the needs and preferences of their target audience.
2. Analyze the competition to identify areas where they can differentiate their product or service.
3. Develop a unique value proposition that highlights the key benefits and features of their product.
4. Communicate the value proposition consistently across all marketing channels.
5. Continuously review and update the positioning and differentiation strategy to remain relevant and
competitive in the market.
Overall, effective positioning and differentiation strategies are key components of a successful marketing
strategy that can help companies to stand out in a crowded market and drive growth and profitability.

There are several positioning strategies that companies can use to create a unique identity for their brand or
product in the minds of their target audience. Here are some common positioning strategies:

1. Benefit positioning: This strategy focuses on highlighting the benefits of the product or service to
the customer. For example, a shampoo brand may position itself as providing healthy, shiny hair.
2. Attribute positioning: This strategy emphasizes a specific attribute or feature of the product or
service. For example, a car manufacturer may position their cars as having superior safety features.
 3. Price positioning: This strategy focuses on positioning the product or service as being affordable or
offering good value for money. For example, a grocery store may position itself as offering the
lowest prices in the market.
4. Quality or luxury positioning: This strategy positions the product or service as a high-quality or
luxury item. For example, a jewellery brand may position itself as offering high-end, luxury
jewellery.
5. Competitor-based positioning: This strategy positions the product or service in relation to the
competition. For example, a soft drink brand may position itself as being a healthier alternative to
other soft drink brands.
6. User-based positioning: This strategy positions the product or service based on the needs or
preferences of the target audience. For example, a skincare brand may position itself as being
specifically designed for people with sensitive skin.
Effective positioning strategies are based on a deep understanding of the target audience and their needs,
preferences, and behaviour. Companies must also consider the competition and the market trends to identify
areas where they can differentiate their product or service and stand out in the market. The chosen
positioning strategy should be communicated consistently across all marketing channels to build brand
recognition and increase customer loyalty.
 MODULE 2

Product Decisions:

Product decisions refer to the strategic choices that companies make regarding the design, development, and
management of their products or services. These decisions are critical in determining the success of a
company's marketing strategy, as the product is the core offering that meets the needs of the target market.

Some of the key product decisions that companies need to make include:

1. Product design and development: Companies must determine the features, specifications, and
overall design of their product or service to ensure that it meets the needs and preferences of the
target audience.
2. Product line and mix: Companies must decide on the range and variety of products or services that
they offer to meet the needs of different customer segments and increase their market share.
3. Product branding: Companies must develop a strong brand identity for their products or services to
differentiate them from the competition and build customer loyalty.
4. Product packaging: Companies must design attractive and functional packaging for their products to
enhance their appeal and protect them during transportation and storage.
5. Product labelling and warranties: Companies must provide accurate and informative labeling and
warranties to ensure that customers understand the features and benefits of the product and feel
confident in their purchase decision.
6. Product life cycle management: Companies must continuously monitor and manage their products
throughout their life cycle to ensure that they remain relevant and competitive in the market.
Effective product decisions require a thorough understanding of the target market, customer needs and
preferences, and the competitive landscape. Companies must also consider market trends and technological
advancements to ensure that their products meet the changing demands of the market. By making sound
product decisions, companies can increase their market share, build customer loyalty, and achieve long-term
growth and profitability.

Concept of a product

A product is a tangible or intangible offering that is created by a company to satisfy the needs or wants of its
customers. It can be a physical object, a service, or a combination of both.

Products can be classified into various categories based on their nature and characteristics. For example:

1. Consumer products: These are products that are purchased and used by individuals for personal use.
Examples include clothing, food, and personal care products.
 2. Industrial products: These are products that are used by businesses to produce other goods or
services. Examples include machinery, raw materials, and office equipment.
3. Digital products: These are products that are created and distributed in a digital format. Examples
include e-books, software, and music downloads.
4. Luxury products: These are products that are expensive and cater to a specific market segment.
Examples include high-end cars, jewellery, and designer clothing.
Products can also be further categorized based on their level of tangibility or intangibility. Tangible products
are physical objects that can be touched and felt, while intangible products are services or experiences that
cannot be touched.

The concept of a product is important in marketing because it is the core offering that meets the needs and
wants of the target market. Companies must develop and manage their products effectively to ensure that
they are relevant and competitive in the market. This involves conducting market research to understand
customer needs and preferences, designing and developing products that meet these needs, and continuously
monitoring and adapting products to changes in the market. Effective product management can help
companies increase their market share, build customer loyalty, and achieve long-term growth and
profitability.

Classification of products

Products can be classified into different categories based on various factors such as their tangibility,
durability, usage, and purchasing behaviour of the customers. Some of the commonly used classifications of
products are:

1. Consumer products: These are products that are purchased and used by individuals for personal use.
They are further classified into four categories:
 Convenience products: Products that are purchased frequently and with minimal effort, such as
snacks and newspapers.
 Shopping products: Products that are purchased after a comparison of price, quality, and features,
such as clothing and furniture.
 Specialty products: Products that are unique and cater to specific customer needs, such as luxury
cars and designer clothes.
 Unsought products: Products that customers are not aware of or do not actively seek, such as
funeral services and insurance.
2. Industrial products: These are products that are used by businesses to produce other goods or
services. They are further classified into two categories:
 Material and parts: Products that are used in the production process of other products, such as raw
materials and machinery.
 Capital items: Products that are used by businesses to facilitate the production process, such as
buildings and equipment.
3. Services: These are intangible products that are purchased to fulfill a need or desire. They are further
classified into three categories:
  Business services: Services that are purchased by businesses to enhance their operations, such as
consulting and accounting services.
 Consumer services: Services that are purchased by individuals for personal use, such as healthcare
and transportation services.
 Government services: Services that are provided by the government, such as public education and
defence.
4. Digital products: These are products that are created and distributed in a digital format, such as
software, music, and e-books.
5. Seasonal products: These are products that are only in demand during specific seasons or occasions,
such as Halloween costumes and Christmas decorations.
Classification of products is important for companies to determine their marketing strategies, pricing, and
distribution channels. It also helps companies to identify customer needs and preferences and develop
products that cater to these needs.

Major product decisions

There are several major product decisions that companies need to make to ensure the success of their
products in the market. Some of the major product decisions are:

1. Product design and development: This involves creating and designing a product that meets the
needs and preferences of the target market. The company needs to ensure that the product is of high
quality, functional, and aesthetically appealing.
2. Product features and packaging: Companies need to decide on the features and benefits of the
product, including its size, shape, colour, and packaging. The packaging should be attractive, easy to
use, and functional.
3. Product branding: Companies need to create a brand identity for the product that reflects its
attributes and benefits. This includes developing a brand name, logo, and other brand elements that
differentiate the product from its competitors.
4. Product positioning: Companies need to position their product in the market based on its unique
features and benefits. This involves identifying the target market and developing a marketing strategy
that effectively communicates the product's value proposition.
5. Product pricing: Companies need to determine the price of the product based on the costs involved
in manufacturing and distributing it, as well as the prices of competing products in the market. The
pricing strategy should reflect the product's value proposition and be consistent with the company's
overall marketing strategy.
6. Product promotion: Companies need to develop a promotional strategy that effectively
communicates the product's features, benefits, and value proposition to the target market. This may
involve advertising, personal selling, sales promotions, and other forms of communication.
7. Product life cycle management: Companies need to manage the product's life cycle, which includes
the introduction, growth, maturity, and decline stages. This involves making decisions about product
improvements, modifications, and discontinuation to ensure the product remains relevant and
competitive in the market.
Effective product decision-making is essential for companies to achieve their marketing objectives, increase
market share, and build customer loyalty. Companies need to conduct market research, analyze customer
needs and preferences, and continuously monitor and adapt their product strategies to changes in the market.

Product line and Product mix

Product line refers to a group of related products offered by a company. These products may be similar in
terms of their functions, features, or target market. For example, a company that sells shoes may have a
product line for running shoes, another for casual shoes, and another for dress shoes.

Product mix, on the other hand, refers to the entire range of products that a company offers. This includes all
of the different product lines and individual products within those lines. For example, a company that sells
shoes, clothing, and accessories would have a product mix that includes all of those product categories.

The product mix is important because it represents the breadth and depth of a company's offerings. A wide
product mix allows a company to appeal to a broader range of customers and to generate more revenue from
multiple product categories. It also provides opportunities for cross-selling and up-selling, where customers
are encouraged to purchase additional products within the same product mix.

Managing the product line and product mix is important for companies to ensure that they are offering the
right products to the right customers at the right time. This involves analyzing market trends, customer needs
and preferences, and competitors' offerings to determine which products to add, modify, or discontinue.
Effective product line and product mix management can help companies maintain a competitive edge in the
market, increase revenue, and build customer loyalty.

Product mix meaning refers to the complete range of products sold by a business. It varies across
different organizations. While multiple companies only have a limited number of offerings, various
organizations offer different kinds of products grouped under separate product lines.
1. Width: Commonly referred to as breadth, width is the total number of product lines offered by
a business to consumers. For example, if a fast-moving consumer goods or FMCG company sells
potato chips and soaps, it has two product lines. However, it will have three product lines if it starts
offering biscuits.
2. Length: The length is the total number of products in a product portfolio. In other words, businesses can
determine their product mix’s length by adding all the products. For instance, let us say that a company
has five product lines and ten products in each of the lines. In this case, the length will be fifty.
3. Depth: Depth is the different types or variations of products in a particular product line. Generally, the
variations depend on the products’ features like size, shape, etc. For example, a company sells fruit
juices of different flavors (guava, orange, apple, etc.) falling into the same product line.
4. Consistency: This refers to the relationship between the different products in the mix. The relationship
can be regarding the production process, distribution channels, etc. Focusing on this element can help
organizations reduce production costs. Moreover, it ensures that a company’s brand image is
synonymous with its offerings. One must remember that the higher the number of products offered, the
lower the consistency.
Branding

Branding is the process of creating a distinct identity for a business in the mind of your target audience and
consumers. At the most basic level, branding is made up of a company's logo, visual design, mission, and
tone of voice.

A brand is a name, term, design, symbol, or other feature that identifies a product, service, or company and
distinguishes it from competitors in the minds of consumers. A brand is more than just a logo or a product
name; it represents the overall identity and image of the company and encompasses everything from the
quality of its products and services to its reputation, values, and personality.

Branding is the process of creating a unique identity and image for a product, service, or company that sets
it apart from its competitors in the minds of consumers. The objective of branding is to establish a
differentiated and memorable image of the brand in the consumers' minds and to create a strong emotional
connection with them. Branding can be achieved through various marketing techniques, including
advertising, packaging, logo design, and brand messaging.

A strong brand can provide numerous benefits for a company, including:

1. Brand recognition and awareness

2. Increased customer loyalty and repeat business
3. Premium pricing power
4. Competitive advantage in the marketplace
5. Ability to attract and retain top talent
6. Improved brand reputation and trust
7. Opportunities for brand extensions and product line expansion
8. Enhanced customer experience and engagement

To establish a successful brand, a company must first identify its target audience and understand their needs
and desires. The company must then develop a brand identity that resonates with the target audience and sets
it apart from its competitors. This can include creating a brand name, logo, and tagline, and developing
brand messaging that reflects the company's values, personality, and positioning.

Once a brand has been established, it must be consistently communicated across all touchpoints, including
advertising, packaging, customer service, and social media. This consistency helps to reinforce the brand's
image in the minds of consumers and build trust and loyalty over time.

Packaging and Labelling

Packaging and labelling are critical aspects of marketing a product. Packaging refers to the materials used to
enclose or protect a product, while labelling refers to the information and graphics printed on the packaging.
The primary purpose of packaging and labelling is to communicate product information and differentiate the
product from competitors.

Packaging refers to the various activities that are carried out for designing and developing a suitable package
for a product, which may be in the form of a container, wrapper, box, tube, plastic bottle, tetra pack or tin
etc. The packaging must be properly and solidly done so that it can protect the product from contamination,
leakage, evaporation, spoilage or damage during its storage, transportation and promotional activities.

Packaging serves several important functions, including:

1. Protecting the product from damage during transportation and storage.

2. Preserving the quality and freshness of the product.
3. Providing convenience for the consumer, such as easy opening and dispensing.
4. Enhancing the aesthetic appeal of the product and reinforcing the brand image.
5. Providing a medium for product information and marketing messages.

Labeling is done on the product packaging and presents all important information about the product and its
manufacturer. It is often made part of the product package but, if necessary, the information can also be
printed on the product itself. Labelling also plays an essential role in marketing a product. The information
on the label provides consumers with important information about the product, including:

1. Product name and brand identity

2. Ingredients and nutritional information
3. Warnings and safety information
4. Directions for use and storage
5. Expiration or "best before" date
6. Price and weight

In addition to providing this critical information, the label can also be used as a marketing tool to
communicate the product's benefits and unique selling points. This can include eye-catching graphics and
taglines that reinforce the brand image and appeal to the target audience. Overall, effective packaging and
labelling can play a crucial role in the success of a product. They can help to differentiate the product from
competitors, communicate important information to consumers, and enhance the product's overall appeal and
perceived value.

Parameters Packaging Labelling

Meaning It is a process of designing and
creating a container for a product
Purpose To protect the product, product
identification, marketing tool
Function It helps the customers with the
It is a display of all the information on
the packaging material or product itself.
To provide product features and
influence the customer’s decision
To give clear information about the
 decision-making process product
Advantages Product safeguard, facilitates storage, Helps in selling the product by giving a
helps in the sales process, minimizes clear picture of the product
adulteration

Product life cycle

A product life cycle is the length of time from a product first being introduced to consumers until it is
removed from the market. A product's life cycle is usually broken down into four stages; introduction,
growth, maturity, and decline.

The product life cycle is a model that describes the stages a product goes through from its introduction to its
eventual decline and removal from the market. The product life cycle typically consists of four stages:
introduction, growth, maturity, and decline.

1. Introduction: In this stage, the product is new to the market, and sales are low as consumers become
aware of the product. The company may need to invest heavily in advertising and promotion to create
awareness and stimulate demand.
2. Growth: In this stage, sales begin to increase rapidly as the product gains acceptance among
consumers. The company may need to expand production capacity and distribution channels to keep
up with demand. Prices may remain stable or decline slightly as competition increases.
3. Maturity: In this stage, sales growth begins to slow as the product reaches its maximum potential
market penetration. Competition intensifies, and companies may need to focus on product
differentiation or cost-cutting measures to maintain profitability. Prices may begin to decline as
companies compete for market share.
4. Decline: In this stage, sales begin to decline as the product becomes outdated, or newer and better
products replace it in the market. Companies may need to discontinue the product or reposition it in
the market to extend its life cycle.
It is important for companies to understand the product life cycle and adapt their marketing strategies
accordingly. For example, during the introduction stage, the focus may be on building awareness and
generating demand. In the growth stage, companies may need to focus on expanding distribution and
production capacity. In the maturity stage, companies may need to focus on cost-cutting measures or product
differentiation to maintain market share. In the decline stage, companies may need to consider discontinuing
the product or repositioning it in the market.

Product Life Cycle Strategy and Management

Having a properly managed product life cycle strategy can help extend the life cycle of your product in the
market.

The strategy begins right at the market introduction stage with setting of pricing. Options include ‘price
skimming,’ where the initial price is set high and then lowered in order to ‘skim’ consumer groups as the
market grows. Alternatively, you can opt for price penetration, setting the price low to reach as much of the
market as quickly as possible before increasing the price once established.

Product advertising and packaging are equally important in order to appeal to the target market. In addition,
it is important to market your product to new demographics in order to grow your revenue stream.

Products may also become redundant or need to be pivoted to meet changing demands. An example of this is
Netflix, who moved from a DVD rental delivery model to subscription streaming.

Understanding the product life cycle allows you to keep reinventing and innovating with an existing product
(like the iPhone) to reinvigorate demand and elongate the product’s market life.

Examples of the Product Life Cycle

The life cycle of any product always carries it from its introduction to its inevitable decline, but what does
this cycle look like in a practical, real-world sense? Here are four examples.

 Typewriter

A classic example of the scope of the product life cycle is the typewriter.

When first introduced in the late 19th century, typewriters grew in popularity as a technology that improved
the ease and efficiency of writing. However, new electronic technologies like computers, laptops, and even
smartphones replaced typewriters quickly once they were introduced, causing typewriter demand and
revenues to drop off. Overtaken by the likes of companies like Microsoft, typewriters are at the very tail end
of their decline phase, with minimal (if existent) sales and drastically decreased demand. Now, the modern
world almost exclusively uses desktop computers, laptops, tablets, or smartphones to type. Consequently,
these products are experiencing the growth and maturity phases of the product life cycle.

 VCR

Many of us grew up watching videotapes using VCRs (videocassette recorders for any Gen-Z readers), but
you would likely be hard-pressed to find one in anyone's home these days. With the rise of streaming
services like Netflix and Amazon (not to mention the interlude phase of DVDs), VCRs have been effectively
phased out and are deep in their decline stage. Once ground-breaking technology, VCRs are now in very low
demand and are bringing in nearly no sales.

 Electric Vehicles

Electric vehicles are still in the growth stage of the product life cycle. Companies like Tesla, have been
capitalizing on growing demand for years, although recent challenges may signal changes for that particular
company. Still, while the electric car isn't necessarily new, the innovations that companies like Tesla have
made in recent years to adapt to new changes in the electric car market signal that the product is still in its
growth phase.

Product life cycle – strategic implications

Here are some strategic implications of the product life cycle:

1. Introduction Stage: During the introduction stage, businesses need to focus on creating awareness
and generating demand for the new product. This involves heavy investment in marketing and
advertising. Pricing strategies need to be carefully considered to ensure that the product is
competitive in the market.
2. Growth Stage: Once a product gains traction in the market, it enters the growth stage. This is the
time for businesses to maximize their market share and focus on expanding their customer base. This
may involve expanding the product line, investing in new distribution channels, and increasing
production capacity.
3. Maturity Stage: During the maturity stage, sales growth slows down, and competition increases.
Businesses need to focus on maintaining their market share and maximizing profits. This may
involve reducing costs, improving product quality, and differentiating the product from competitors.
4. Decline Stage: Eventually, a product will reach the decline stage, where sales begin to decline due to
changing consumer preferences, increased competition, or technological advancements. Businesses
need to decide whether to continue investing in the product or to discontinue it altogether. This
decision will depend on factors such as the product's profitability, the level of competition, and the
potential for future growth.
Understanding the product life cycle can help businesses make informed decisions about their products and
marketing strategies. By carefully analyzing each stage, businesses can develop effective marketing and
pricing strategies, maximize profits, and make informed decisions about whether to invest in or discontinue a
product.

The New Product Development Process

The new product development process is a systematic approach to developing and introducing new products
to the market. Here are the typical stages involved in the new product development process:

1. Idea Generation: The first stage involves generating new product ideas through various sources
such as market research, customer feedback, brainstorming sessions, and competitive analysis.
2. Idea Screening: In this stage, the ideas are evaluated based on their potential feasibility, profitability,
and alignment with the business objectives. This involves a preliminary assessment of the technical
and market feasibility of the ideas.
3. Concept Development and Testing: The selected ideas are then developed into product concepts
that are presented to potential customers for feedback. This feedback is used to refine and improve
the concept.
4. Business Analysis: The next stage involves a detailed analysis of the potential financial viability of
the new product, including the cost of production, sales projections, pricing, and market potential.
5. Product Development: In this stage, the product design is finalized, and the prototype is developed.
This involves testing and refining the prototype until it meets the required quality standards.
6. Test Marketing: The product is launched in a small test market to evaluate customer response and to
identify any potential issues before a full-scale launch.
7. Commercialization: The final stage involves the full-scale launch of the product, including mass
production, distribution, and marketing.
The new product development process can be complex and time-consuming, but it is essential for businesses
to stay competitive and meet the changing needs of their customers. By following a structured approach,
businesses can minimize the risks associated with launching new products and increase their chances of
success in the market.

Consumer Adoption Process

The consumer adoption process is a five-stage process that consumers go through when deciding to adopt or
reject a new product. These stages are:

1. Awareness: The first stage is when the consumer becomes aware of the new product. This may
happen through advertising, word-of-mouth, or other marketing channels.
2. Interest: Once the consumer becomes aware of the new product, they may start to show interest in it.
This could be through researching the product, reading reviews, or seeking more information about
it.
3. Evaluation: In this stage, the consumer evaluates the new product based on their needs and
preferences. They compare it to other products in the market and weigh the benefits and drawbacks.
4. Trial: If the consumer decides that the new product meets their needs, they may try it out. This could
be through a free trial, a sample, or by purchasing a small amount of the product.
5. Adoption: The final stage is when the consumer decides to adopt the new product and make it a
regular part of their buying behaviour. This could involve repeat purchases, loyalty to the brand, and
positive word-of-mouth.
It's important for businesses to understand the consumer adoption process when launching new products. By
identifying where their target audience is in the adoption process, they can develop effective marketing
strategies to move consumers through the stages more quickly. This could involve creating awareness
through advertising, offering free samples or trials to encourage trial, and leveraging positive reviews and
word-of-mouth to encourage adoption.

Pricing Decisions

Pricing decisions are crucial for any business as they determine the revenue and profitability of the product
or service. Pricing decisions involve determining the optimal price for a product or service that will
maximize revenue and profitability while considering various factors, such as the target market, competition,
cost of production, and consumer demand.

Pricing is a process to determine what manufactures receive in exchange of the product. Pricing depends on
various factors like manufacturing cost, raw material cost, profit margin etc.

Pricing decisions are the choices businesses make when setting prices for their products or services. Pricing
is considered part of a company’s marketing strategy because it influences its relationship with customers:
When prices are fair and competitive, customers come back, increasing the profitability of the business.

Pricing decisions can be simple or complex.

 Simple pricing involves charging what competitors charge for similar goods and services. This
strategy is often used by retailers and wholesalers selling commodities. Companies that make simple
pricing decisions often try to increase sales by making small, competitive adjustments such as
purchase discounts, volume discounts and purchase allowances.
 Complex pricing is based on the originality of a product or service and what customers are willing
to pay for it. This type of pricing is determined through negotiation with the customer and is common
for custom furniture, artworks and consulting services.
Whether pricing strategy is simple or complex, a business must:

 Understand its customers and how price influences their purchasing decisions
 Know what competitors are offering and what they charge for their products and services
 Adjust quickly to changes in markets, vendors and customers
 Help customers understand why its products or services are priced as they are
 Be able to negotiate with wholesalers, retailers and other suppliers and resellers
 Track how pricing affects sales

Objectives of Pricing

The main objectives of pricing can be learnt from the following points –
 • Maximization of profit in short run
• Optimization of profit in the long run
• Maximum return on investment
• Decreasing sales turnover
• Fulfil sales target value
• Obtain target market share
• Penetration in market
• Introduction in new markets
• Obtain profit in whole product line irrespective of individual product profit targets
• Tackle competition
• Recover investments faster
• Stable product price
• Affordable pricing to target larger consumer group
• Pricing product or services that simulate economic development
Factors Influencing Pricing
Pricing of a product is influenced by various factors as price involves many variables. Factors can be
categorized into two, depending on the variables influencing the price.
Internal Factors
The following are the factors that influence the increase and decrease in the price of a product internally –
• Marketing objectives of company
• Consumer’s expectation from company by past pricing
• Product features
• Position of product in product cycle
• Rate of product using pattern of demand
• Production and advertisement cost
• Uniqueness of the product
• Production line composition of the company
• Price elasticity as per sales of product
Internal factors that influence pricing depend on the cost of manufacturing of the product, which includes
fixed cost like labor charges, rent price, etc., and variable costs like overhead, electric charges, etc.

External Factors
The following are the external factors that have an impact on the increase and decrease in the price of a
product:
• Open or closed market
• Consumer behaviour for given product
• Major customer negotiation
• Variation in the price of supplies
• Market opponent product pricing
• Consideration of social condition
• Price restricted as per any governing authority
External factors that influence price depend on elements like competition in market, consumer flexibility to
purchase, government rules and regulation, etc.
Factors affecting price determination
Price determination involves several factors that affect the final price of a product or service. Here are some
of the key factors that businesses consider when setting prices:
1. Cost of production: The cost of production is a critical factor in determining the price of a product
or service. Businesses need to ensure that the price they set covers the cost of production while still
providing a reasonable profit margin.
2. Competition: The level of competition in the market can have a significant impact on pricing
decisions. Businesses need to consider the prices of their competitors and adjust their prices
accordingly to remain competitive.
3. Customer demand: The level of customer demand for the product or service can also impact pricing
decisions. Businesses may increase prices if demand is high or decrease prices if demand is low.
4. Perceived value: The perceived value of the product or service by the customer can also affect
pricing decisions. If customers perceive the product or service as having high value, businesses may
be able to charge a premium price.
5. Brand image: The brand image and reputation of a business can also influence pricing decisions.
Businesses with a strong brand image may be able to charge a premium price for their products or
services.
6. Market conditions: Market conditions such as inflation, economic conditions, and changes in the
exchange rate can also affect pricing decisions. Businesses need to adjust their prices accordingly to
remain competitive in the market.
7. Government regulations: Government regulations such as taxes, tariffs, and price controls can also
impact pricing decisions. Businesses need to ensure that they comply with all relevant regulations
and adjust their prices accordingly.
By considering these factors, businesses can make informed pricing decisions that balance profitability,
customer value, and market competitiveness.

Pricing Policies and Strategies

Pricing policies and strategies refer to the principles and guidelines that businesses use to determine the
optimal price for their products or services. Here are some common pricing policies and strategies:

1. Price skimming: In this strategy, a business charges a high price for a new product or service to
target early adopters who are willing to pay a premium. The price is then gradually reduced over time
as the product or service becomes more mainstream.
2. Penetration pricing: This strategy involves setting a low price to gain market share and attract new
customers. Once the product or service gains popularity, the price may be increased.
3. Value-based pricing: This strategy sets the price based on the perceived value of the product or
service to the customer. This could be higher than the cost-plus price if the product or service offers
significant value to the customer.
4. Cost-plus pricing: This pricing policy involves setting the price by adding a markup percentage to
the cost of production. The markup percentage is determined by the desired profit margin.
5. Dynamic pricing: This strategy adjusts the price based on real-time changes in supply and demand.
For example, prices may be increased during peak demand periods or decreased during off-peak
periods.
6. Psychological pricing: This strategy sets the price to create a perception of value in the customer's
mind. For example, setting the price at Rs. 9.99 instead of Rs. 10.00.
7. Promotional pricing: This pricing policy involves setting a temporary price to attract customers. For
example, offering a discount or running a sale.
When developing pricing policies and strategies, businesses need to consider their target market,
competition, cost of production, and desired profit margin. By balancing these factors, businesses can set
prices that are competitive, profitable, and offer value to their customers.

Discounts and rebates

Discounts and rebates are pricing strategies that businesses use to attract customers and increase sales. Here's
an overview of each:

Discounts: Discounts are a reduction in the price of a product or service. They are often used to encourage
customers to buy more or to buy a product they might not have otherwise considered. Here are some
common types of discounts:

1. Quantity discounts: These discounts are offered when customers buy in bulk. For example, buy one
get one free, or 10% off when buying more than 5 items.
2. Seasonal discounts: These discounts are offered during specific times of the year, such as holiday
sales or end-of-season clearance sales.
3. Trade discounts: These discounts are offered to wholesalers or retailers who buy products in bulk
and then resell them to customers.
4. Promotional discounts: These discounts are offered as part of a promotion or marketing campaign.
For example, offering a discount to customers who sign up for a newsletter or follow the business on
social media.
Rebates: Rebates are a refund or return of part of the purchase price of a product or service. They are often
used to encourage customers to buy a product or service by offering a refund after the purchase. Here are
some common types of rebates:

1. Mail-in rebates: These rebates require customers to mail in a rebate form and proof of purchase to
receive a refund.
2. Instant rebates: These rebates are applied at the time of purchase, reducing the price of the product
or service.
3. Online rebates: These rebates are processed online and require customers to submit proof of
purchase and other information.
4. Conditional rebates: These rebates are offered on the condition that the customer meets certain
requirements, such as buying a specific product or service or making a minimum purchase.
When offering discounts or rebates, businesses need to ensure that they can still maintain profitability and
achieve their desired profit margin. It's important to balance the benefits of offering discounts and rebates
with the potential impact on the bottom line.

MODULE 3
Distribution Channels
Distribution Channels
Distribution channels refer to the various pathways through which products or services are made available to
customers. A company's choice of distribution channel can have a significant impact on its sales and
profitability. Here are some common distribution channels:

1. Direct distribution: In this channel, the manufacturer sells products or services directly to the
customer without using intermediaries. This can be done through a company-owned retail store, e-
commerce website, or sales team.
2. Retail distribution: In this channel, products or services are sold to customers through third-party
retailers, such as department stores, supermarkets, or specialty stores. The manufacturer may sell
products to retailers at a wholesale price, and the retailers then sell the products to customers at a
higher price to make a profit.
3. Wholesale distribution: In this channel, manufacturers sell products to wholesalers, who then sell
products to retailers or directly to customers. Wholesalers may buy products in bulk and then sell
them at a discounted price to retailers.
4. Franchise distribution: In this channel, a franchisor grants a franchisee the right to sell its products
or services under its brand name. The franchisee may be responsible for selling products through a
physical store or online platform.
5. Agent distribution: In this channel, the manufacturer hires agents or brokers to sell its products or
services to customers. Agents may work on commission and may be responsible for finding new
customers and promoting the manufacturer's products.
When choosing a distribution channel, companies need to consider factors such as the target market,
competition, product characteristics, and profitability. By selecting the right distribution channel, companies
can ensure that their products or services reach the right customers at the right time, while maximizing their
profits.

Physical Distribution Decisions

Physical distribution takes place within numerous wholesaling and retailing distribution channels, and
includes such important decision areas as customer service, inventory control, materials handling, protective
packaging, order procession, transportation, warehouse site selection, and warehousing.

Physical distribution, also known as logistics, refers to the process of moving products from the
manufacturer to the end customer. Physical distribution decisions include a range of activities such as
transportation, warehousing, inventory management, and order processing. Here are some important physical
distribution decisions:

1. Transportation: Companies need to decide on the best mode of transportation to move their
products from the manufacturer to the customer. This may include road, rail, air, or sea
transportation. Factors such as cost, speed, reliability, and the nature of the product will all influence
this decision.
2. Warehousing: Companies need to decide on the location and type of warehouse to use. This may
include company-owned or third-party warehouses, and factors such as proximity to the customer,
cost, and security will all need to be considered.
3. Inventory management: Companies need to decide on the appropriate level of inventory to hold to
meet customer demand without having excess inventory. This may include using just-in-time
 inventory management systems, which minimize inventory holding costs by ordering goods just as
they are needed.
4. Order processing: Companies need to decide on the best system for receiving and processing
customer orders. This may include using electronic ordering systems to improve efficiency and
reduce errors.
5. Packaging and labelling: Companies need to decide on the type of packaging and labelling to use to
protect products during transportation and ensure they are easily identifiable for customers.
Physical distribution decisions are critical to the success of a business. By managing physical distribution
effectively, companies can minimize costs, improve efficiency, and provide better customer service.

Nature, Functions, and Types of Distribution Channels

Distribution channels are pathways through which products and services move from the manufacturer to the
end customer. Here's an overview of the nature, functions, and types of distribution channels:

Nature:

 Distribution channels are an important part of a company's marketing strategy.

 They help to bridge the gap between the manufacturer and the customer.
 They provide a means of delivering products and services to the end customer at the right time and in
the right place.
 They also allow for the promotion and sale of products to the target market.
Functions:

 Distribution channels perform several functions, including facilitating transactions between buyers
and sellers, providing information about products, and providing support services such as after-sales
service.
 They also help to break down the bulk of products and services into smaller units that are more
convenient for customers to purchase and use.
 Distribution channels also help to reduce the number of transactions required for a product to reach
the end customer, thereby reducing transaction costs.
Types:

1. Direct distribution: In this channel, the manufacturer sells products or services directly to the end
customer without using intermediaries.
2. Retail distribution: In this channel, products or services are sold to customers through third-party
retailers, such as department stores, supermarkets, or specialty stores.
3. Wholesale distribution: In this channel, manufacturers sell products to wholesalers, who then sell
products to retailers or directly to customers.
4. Franchise distribution: In this channel, a franchisor grants a franchisee the right to sell its products
or services under its brand name.
5. Agent distribution: In this channel, the manufacturer hires agents or brokers to sell its products or
services to customers.
 6. Online distribution: In this channel, products or services are sold to customers through online
platforms, such as e-commerce websites or mobile apps.
7. Dual distribution: In this channel, a manufacturer may use multiple distribution channels to sell its
products or services.
Overall, the choice of distribution channel will depend on various factors such as the target market, product
characteristics, and competition. It is important for companies to choose the most effective distribution
channel to reach their target market, optimize sales, and achieve customer satisfaction.
Channels of distribution can be divided into direct channel and indirect channels. Indirect channels can
further be divided into one-level, two-level, and three-level channels based on the number of intermediaries
between manufacturers and customers.

Direct Channel or Zero-level Channel (Manufacturer to Customer)

Direct selling is one of the oldest forms of selling products. It doesn’t involve the inclusion of an
intermediary and the manufacturer gets in direct contact with the customer at the point of sale. Some
examples of direct channels are peddling, brand retail stores, taking orders on the company’s website, etc.
Direct channels are usually used by manufacturers selling perishable goods, expensive goods, and whose
target audience is geographically concentrated. For example, bakers, jewellers, etc.

Indirect Channels (Selling Through Intermediaries)

When a manufacturer involves a middleman/intermediary to sell its product to the end customer, it is said to
be using an indirect channel. Indirect channels can be classified into three types:

One-level Channel (Manufacturer to Retailer to Customer)

Retailers buy the product from the manufacturer and then sell it to the customers. One level channel of
distribution works best for manufacturers dealing in shopping goods like clothes, shoes, furniture, toys, etc.

Two-Level Channel (Manufacturer to Wholesaler to Retailer to Customer)

Wholesalers buy the bulk from the manufacturers, break it down into small packages and sell them to
retailers who eventually sell them to the end customers. Goods that are durable, standardised and somewhat
inexpensive and whose target audience isn’t limited to a confined area use two-level channel of distribution.

Three-Level Channel (Manufacturer to Agent to Wholesaler to Retailer to Customer)

Three-level channel of distribution involves an agent besides the wholesaler and retailer who assists in
selling goods. These agents come in handy when goods need to move quickly into the market soon after the
order is placed. They are given the duty to handle the product distribution of a specified area or district in
return for a certain percentage of commission.

The agents can be categorised into super stockists and carrying and forwarding agents. Both these agents
keep the stock on behalf of the company.

Dual Distribution
When a manufacturer uses more than one distribution channel simultaneously to reach the end-user, he is
said to be using the dual distribution strategy. They may open their own showrooms to sell the product
directly while at the same time use internet marketplaces and other retailers to attract more customers.

A perfect example of goods sold through dual distribution is smartphones.

Distribution Channels for Services

Unlike tangible goods, services can’t be stored. But this doesn’t mean that all the services are always
delivered using the direct channels. With the advent of the internet, online marketplaces, the aggregator
business model, and the on-demand business model, even services now use intermediaries to reach the final
customers.

The Internet as a Distribution Channel

The internet has revolutionised the way manufacturers deliver goods. Other than the traditional direct and
indirect channels, manufacturers now use marketplaces like Amazon (Amazon also provide warehouse
services for manufacturers’ products) and other intermediaries like aggregators (Uber, Instacart) to deliver
the goods and services. The internet has also resulted in the removal of unnecessary middlemen for products
like software which are distributed directly over the internet.

Distribution Channel Intermediaries

Distribution channel intermediaries are third-party individuals or organizations that facilitate the movement
of products and services from the manufacturer to the end customer. They act as middlemen between the
manufacturer and the customer, performing various functions to ensure that products are delivered to the
right place, at the right time, and in the right condition. Here are some examples of distribution channel
intermediaries:

1. Wholesalers: Wholesalers buy products in bulk from the manufacturer and sell them to retailers or
other intermediaries. They typically carry a wide range of products from multiple manufacturers and
provide services such as inventory management, order fulfilment, and transportation.

2. Distributors: Distributors are intermediaries that specialize in specific product categories or

geographic regions. They may provide services such as warehousing, transportation, marketing, and
sales support.

3. Retailers: Retailers are intermediaries that sell products directly to the end customer. They may
operate in physical stores or online, and provide services such as product display, customer service,
and after-sales support.
 4. Agents and brokers: Agents and brokers are intermediaries that represent manufacturers and sell
their products to customers. They may work on a commission basis and provide services such as
market research, product promotion, and order processing.

5. Dealers and resellers: Dealers and resellers are intermediaries that specialize in a particular product
category or customer segment. They may provide services such as product customization,
installation, and maintenance.

6. The Internet: To those who sell tech and software, the internet itself works as the intermediary of
the distribution channel. The consumer only has to download the material to have access to it. E-
commerce companies also use the internet as a distribution intermediary.

Distribution channel intermediaries play a critical role in the distribution process by providing a range of
value-added services to manufacturers and customers. By leveraging the expertise and resources of
intermediaries, manufacturers can reach a wider customer base, reduce costs, and improve efficiency.
Intermediaries also provide customers with greater convenience, choice, and accessibility to products and
services.

Channel Management Decisions

Channel management decisions refer to the strategic choices that a company makes regarding the design,
development, and management of its distribution channels. Effective channel management is essential for
achieving optimal market coverage, efficient distribution, and customer satisfaction. Here are some of the
key channel management decisions that companies need to make:

1. Channel design: This involves selecting the most appropriate distribution channel(s) based on the
target market, product characteristics, and competitive environment. Companies need to decide on
the number and type of intermediaries to use, as well as the structure of the distribution system.
2. Channel strategy: This involves developing a clear and consistent plan for managing the distribution
channels, including pricing policies, promotional strategies, and channel incentives. Companies need
to ensure that their channel strategy is aligned with their overall marketing objectives and brand
positioning.
3. Channel partner selection: This involves identifying and selecting the most suitable intermediaries
to work with, based on their capabilities, resources, and reputation. Companies need to evaluate
potential partners based on their financial stability, market coverage, customer base, and distribution
capabilities.
4. Channel integration: This involves coordinating and integrating the activities of different channel
partners to ensure a seamless and efficient distribution process. Companies need to establish effective
communication, collaboration, and performance metrics to ensure that all channel partners are
working together towards common goals.
 5. Channel evaluation: This involves monitoring and evaluating the performance of the distribution
channels to identify areas of improvement and opportunities for optimization. Companies need to
measure key performance indicators such as sales, market share, customer satisfaction, and
profitability, and use this information to make informed decisions about channel management.
Overall, effective channel management is critical for achieving sustainable competitive advantage in today's
complex and dynamic business environment. By making strategic decisions about channel design, strategy,
partner selection, integration, and evaluation, companies can build strong and profitable distribution
channels that deliver value to customers and stakeholders alike.

Retailing and Wholesaling

Retailing and wholesaling are two important distribution activities that play a crucial role in connecting
manufacturers with end customers. While retailing involves selling products directly to consumers,
wholesaling involves selling products to other businesses or intermediaries. Here is an overview of retailing
and wholesaling:

Wholesaling: Wholesaling refers to the process of selling products and services to other businesses or
intermediaries. Wholesalers typically buy products in bulk from manufacturers and sell them to retailers,
other wholesalers, or industrial customers. They provide a range of services to their customers, including
inventory management, transportation, and credit facilities. Some common types of wholesalers include
merchant wholesalers, agents and brokers, and manufacturers' sales branches and offices. Wholesalers play a
key role in the distribution process by providing a link between manufacturers and retailers, as well as a
platform for manufacturers to reach new markets and expand their customer base.

Wholesaling refers to selling goods to consumers such as retailers, industries, or any other entity in bulk
quantities and at lower prices. A wholesaler buys products from the manufacturer in large quantities, splits
them into smaller lots, repacks them further, and sells them to the next party.

Major Types of Wholesalers

 Merchant Wholesalers: The wholesalers that purchase products directly from the manufacturer are
called merchant wholesalers. There is no restriction on the channel where these products are
ultimately sold, offline or online. These wholesalers are commonly used in the FMCG industry or the
agriculture industry.
 Specialized Wholesalers: Specialized wholesalers are those wholesalers who deal in specialised
products only. For example – a used car wholesaler sells directly to other used car dealers.
  Full-Service Wholesalers: As the name suggests, full-service retailers provide complete services to
retailers. They generally operate in the retail market and deal in consumer durables or engineering
products, taking responsibility for everything except the servicing of the product.
 Limited-Service Wholesalers: This type of wholesaler has a small turnover and sells products
through a limited number of channels. For example, a wholesaler purchases products, stocks them
and sells them online.

Retailing: Retailing refers to the process of selling products and services directly to end consumers.
Retailers operate in a variety of formats, including physical stores, online platforms, and mobile apps. They
provide a range of services to customers, including product display, customer service, and after-sales
support. Some common types of retailers include department stores, supermarkets, specialty stores, and
online retailers. Retailers play a key role in the distribution process by providing a convenient and accessible
point of sale for consumers, as well as a platform for manufacturers to showcase their products and build
brand awareness.

Retailing refers to selling goods in smaller lots, without any purpose of further resale, to the end customers.
Retailers are the middleman between wholesalers and end-users, as they purchase goods in bulk from
wholesalers and sell them further to buyers at higher prices

Types of Retailers

 Convenience Stores: The best thing about a convenience store is that it is located close to residential
areas and hence, easily accessible to the customers. However, it’s relatively small and offers a limited
range of groceries, FMCG products, etc.
 Departmental Stores: Compared to convenience stores, departmental stores are larger. This is
because various departments, such as food, apparel, beauty & personal care, are under one roof.
 Super Markets: A supermarket has even more space than a departmental store, offering even more
categories of products. These also include home decor, electronics and much more.
 Shopping Malls: Needless to explain, a shopping mall is a space enclosing a combination of various
retail stores. These retail stores share the area and do business individually. For a customer,
everything is easily accessible in a single place. This results in a better shopping experience for
someone who wants to purchase multiple products of multiple categories.
 Retail Chains: Retail chain refers to a chain of exclusively designed and promoted stores that deal in
particular goods and services. These stores sell the same products under the same brand name, but
multiple such stores are located in different regions. For example, jewellery stores by Tanishq.
  Franchisees: Franchisee is an easier way of entering the retail sector. In a franchisee, a sizeable
supporting organisation licenses a store to be owned and operated by you on its behalf. For example,
Domino’s, Burger King, etc.
 Specialty Stores: As the name suggests, a speciality store is a shop that offers a particular category
of products such as medicines, stationery, food items, etc. The reach of this kind of store is limited to
one specific retail market.
 Factory Outlets: Factory outlets are those retail stores that sell the products directly to the customers
at relatively low prices, without the involvement of any middlemen. Manufacturers own and operate
these outlets. For example, the factory outlets of Reebok.

In summary, retailing and wholesaling are both critical components of the distribution process, and each
plays a unique role in connecting manufacturers with end customers. By leveraging the strengths of both
retailing and wholesaling, manufacturers can build strong and efficient distribution channels that deliver
value to customers and drive business success.

Wholesaling Vs Retailing

By now, you must have understood the basics of wholesaling and retailing. Coming to the point, how
different are the two? This table will help give you a clear picture:

Point of Difference Wholesaling Retailing

Meaning A wholesaler purchases products A retailer purchases products from a
in bulk from a manufacturer. wholesaler and sells them further in small
quantities to the end customer.
Price Lower Higher
Transaction Volume Larger Smaller
Business Reach Broader Narrower
Competition Lower Higher
Product Range Limited Wider
Need For Promotion Less More
Cost Lower Higher
Capital Investment Huge Little
 MODULE 4
Promotion Decisions
Promotion decisions refer to the identification of promotional goals as well as the resources and tools needed
to achieve those goals. As a result, we define marketing promotion as follows. Marketing promotions are
tools that help companies communicate with customers and inform them about a product.

Promotion decisions in marketing are crucial to the success of a business's marketing strategy. Here are some
factors to consider when making promotion decisions in marketing:

1. Target Audience: The target audience is the group of people or businesses that the marketing
campaign is designed to reach. It is important to consider the needs, wants, and preferences of the
target audience when making promotion decisions.
2. Marketing Goals: The marketing goals should be clearly defined, such as increasing brand
awareness, generating leads, or increasing sales. Promotion decisions should be aligned with these
goals to ensure the marketing campaign's effectiveness.
3. Budget: The budget is a critical factor when making promotion decisions in marketing. It is
important to allocate resources effectively to ensure the most significant return on investment.
4. Promotional Mix: The promotional mix refers to the different types of marketing communication
used to promote a product or service, including advertising, sales promotion, personal selling, direct
marketing, and public relations. The promotional mix should be chosen based on the target audience,
marketing goals, and budget.
5. Creativity: Promotion decisions should be creative and innovative to grab the attention of the target
audience. Use creative strategies such as humor, storytelling, and interactive content to engage and
connect with the audience.
6. Measuring Success: It is important to measure the success of the promotion decisions and adjust the
marketing strategy accordingly. Metrics such as website traffic, social media engagement, and sales
conversions can help measure the success of the promotion decisions.
In summary, promotion decisions in marketing should consider the target audience, marketing goals, budget,
promotional mix, creativity, and measuring success to ensure the marketing campaign's effectiveness and
success.

Communication Process

The communication process in promotion involves the exchange of messages between a business and its
target audience to promote its products or services. Here are the key components of the communication
process in promotion in marketing:
 1. Sender: The sender is the business that initiates the promotion process. They create the promotional
message and transmit it through various channels.
2. Message: The message is the information that the sender wants to convey to the target audience. It
can be in the form of text, images, videos, or other media.
3. Encoding: The sender encodes the message into a format that can be easily understood by the target
audience. For example, they may use simple language, catchy slogans, or persuasive visuals to
convey the message.
4. Channel: The channel is the medium through which the message is transmitted. It can be a print ad,
television commercial, social media post, email, or other channels.
5. Decoding: The target audience decodes the message by interpreting the meaning of the message.
They use their past experiences, beliefs, and values to understand the message.
6. Receiver: The receiver is the target audience who receives the message. They are the ones who
ultimately decide whether to act on the message or ignore it.
7. Feedback: Feedback is the response that the receiver provides to the sender. It can be in the form of
purchases, inquiries, comments, or other types of engagement. Feedback helps the sender understand
the effectiveness of the promotional message and adjust it accordingly.
Overall, the communication process in promotion in marketing involves a sender who encodes a message,
transmits it through a channel, and the target audience decodes the message to provide feedback. Effective
communication requires careful consideration of the message, channel, and audience to ensure that the
message is received and understood as intended.

Promotion Mix

Promotion mix is the combination of various communication tools used by a business to promote its
products or services to its target audience. The promotion mix typically consists of four key elements, they
are:

1. Advertising: Advertising is a paid form of communication that involves the use of mass media
channels, such as television, radio, print, or online advertising, to promote a business's products or
services to a large audience.
2. Sales Promotion: Sales promotion involves short-term incentives, such as discounts, coupons,
contests, or free samples, that are designed to encourage customers to purchase a product or service.
3. Personal Selling: Personal selling involves one-on-one interaction between a salesperson and a
potential customer. This interaction may occur face-to-face, over the phone, or through online
communication, and is designed to persuade the customer to make a purchase.
4. Public Relations: Public relations involve the use of non-paid communication tools, such as press
releases, sponsorships, events, or social media, to create a positive image of the business and its
products or services in the eyes of the target audience.
In addition to these four key elements, some marketers also include two additional elements in the promotion
mix:
 5. Direct Marketing: Direct marketing involves reaching out to individual customers directly, through
mail, email, or text messages, with personalized offers or information about the business's products
or services.
6. Personal Experience: Personal experience involves creating a positive experience for customers
through product demonstrations, free trials, or experiential events to build brand awareness and
create a long-term relationship with the customer.
Overall, the promotion mix is the combination of different communication tools that a business uses to
create awareness, generate interest, and encourage customers to purchase its products or services. The choice
of the promotion mix elements should be based on the target audience, marketing goals, and available
budget.

Advertising

Advertising is a paid form of communication used to persuade an audience to take some action, usually with
respect to a commercial offering, such as an item for sale or a service. Examples of advertising include
television and print advertisements, product placements, and infomercials.

Advertising can be an effective way to reach a large audience and create brand awareness. However, it can
also be expensive and requires careful planning and execution to ensure that the message is delivered
effectively. To create an effective advertising campaign, businesses should consider their target audience,
marketing goals, and available budget, and choose the appropriate advertising channels and messaging to
reach their objectives.

Types of Advertising

 Print Advertising (newspapers, magazines, direct mailers)

 Broadcast Advertising (television, radio)
 Outdoor Advertising (billboards and transit advertising)
 Digital Advertising (online display ads, search engine marketing, social media ads)

Here are some of the most common types of advertising:

 Display advertising: Display advertising includes banner ads, pop-up ads, and other types of
graphical ads that are displayed on websites, social media platforms, or mobile apps.
 Search engine advertising: Search engine advertising involves placing ads on search engine results
pages, typically using pay-per-click (PPC) advertising.
 Social media advertising: Social media advertising involves placing ads on social media platforms
such as Facebook, Instagram, Twitter, or LinkedIn.
  Video advertising: Video advertising involves using video ads to promote products or services on
platforms such as YouTube, Facebook, or Instagram.
 Native advertising: Native advertising is a type of advertising that is designed to blend in with the
content on a website or platform, making it less intrusive and more effective.
 Print advertising: Print advertising includes ads placed in newspapers, magazines, brochures, or
other printed materials.
 Outdoor advertising: Outdoor advertising includes billboards, signs, or other displays that are
placed in public areas to attract attention.
 Broadcast advertising: Broadcast advertising includes TV and radio ads, as well as other types of
audio and video content.

The choice of advertising type will depend on the target audience, marketing goals, and available budget. An
effective advertising campaign requires careful planning and execution to ensure that the message reaches
the right people in the right way.

Personal Selling

Personal selling is a face-to-face selling technique by which a salesperson uses his or her interpersonal skills
to persuade a customer in buying a particular product. The salesperson tries to highlight various features of
the product to convince the customer that it will only add value.

Personal selling is a form of promotional communication where a salesperson interacts one-on-one with a
potential customer to persuade them to make a purchase or take a desired action. It is a face-to-face
communication process between the salesperson and the customer.

The goal of personal selling is to build a relationship with the customer, understand their needs and
preferences, and provide them with a personalized solution that meets their needs. The salesperson can
answer any questions that the customer may have about the product or service, provide demonstrations, and
address any objections or concerns.

Personal selling can take place in various settings, including in-store, door-to-door, or through online
communication such as video calls or live chat. It is commonly used in high-end or complex product sales,
where a personal interaction can help to build trust and create a long-term relationship with the customer.

Personal selling can be an effective way to close a sale, as the salesperson can adapt their approach based on
the customer's needs and preferences. However, it can also be expensive and requires skilled salespeople
who can effectively communicate the benefits of the product or service to the customer.
Overall, personal selling is a powerful tool in a business's promotional mix that can help to create a positive
customer experience and build long-term relationships with customers.

Personal Selling Examples

Personal selling is where businesses use the sales force to sell the product after meeting the customer face-
to-face. The sellers advertise these products through their skills such as attitude, appearance, and specialist
product knowledge. The salesperson informs and encourages the customer to buy or at least try the product.
A unique example of personal selling is found in the department stores on the perfume and cosmetic
counters. A customer can get advice on how to apply the product, its specialties and can try different related
products, these all are guided by the personal selling staff present there. Products with high prices, and with
complex features, are often sold using this type of technique.

Examples: Cars and many products that are sold by businesses to other industrial customers.

Importance of Personal Selling

The following points explain the importance of personal selling:

1. Two-Way Communication: This is the best tool for personal selling. Salesmen can provide necessary
information to customers about the company's offer, and also can collect feedback from customers. He
can ask if there are any queries about the product to the salesman present for personal selling.
2. Personal Attention: Advertising and publicity are among mass communication tools, and thus
personal selling is concentrated and is focused on one individual, this will result in ineffective results.
3. Detail Demonstration: Television demonstrations are limited; thus, salesmen can provide a detailed
demonstration and can supervise the customer through personal selling.
4. Complementary to other Promotional Tools: Personal selling supports advertising, sales promotion,
and publicity. Personal Selling even removes the drawbacks of advertising and its sales promotion.
5. Immediate Feedback: This is the only market promotion technique that provides immediate feedback
from the customers.
Advantages of Personal Selling

The Advantages of Personal Selling are as follows –

 This is a two-way communication where the selling agent gets instant feedback from the prospective
buyer about their intention to buy.
 This is an interactive form of selling, which helps in building trust with the customer. While selling
high-value products like cars, the customer must trust the product and thus personal selling is
needed.
 Personal Selling is a persuasive form of selling as in this type of sale the customers come face to face
with the salesperson where it is not easy to dismiss them, there is an effort of the customer to listen to
them.
 Direct selling helps in reaching the audience.
Limitations of Personal Selling
  It is an expensive method of selling that requires high capital costs.
 Also, this method involves many labours as it is a labour-intensive method as a large sales force is
needed to carry out personal selling successfully.
 The training of the salesperson for personal selling is also a very time-consuming and costly process.
 The method can only reach a limited number of people, it does not provide mass advertisements like
TV or Radio ads.
Sales Promotion

A sales promotion is a marketing strategy in which a business uses a temporary campaign or offer to
increase interest or demand in its product or service. There are many reasons why a business may choose to
use a sales promotion (or 'promo'), but the primary reason is to boost sales.

Sales promotion is a marketing strategy that aims to increase sales and stimulate customer interest in a
product or service through temporary incentives or offers. It involves a range of promotional activities that
are designed to encourage customers to make a purchase or take a desired action, such as signing up for a
service or attending an event.

Some common examples of sales promotions include:

1. Discounts: Offering discounts on the price of a product or service can encourage customers to make
a purchase.
2. Coupons: Providing customers with coupons that offer discounts or free products can incentivize
them to make a purchase.
3. Rebates: Offering customers a rebate on their purchase after they have bought a product can
encourage them to make a purchase.
4. Free samples: Providing customers with free samples of a product can encourage them to try it and
potentially make a purchase.
5. Contests and sweepstakes: Running a contest or sweepstakes can encourage customers to engage
with a product or service and potentially make a purchase.
6. Loyalty programs: Offering customers rewards or benefits for repeat purchases can encourage them
to continue buying from a business.
Sales promotions are often used in conjunction with other marketing strategies, such as advertising and
personal selling. They can be effective in generating short-term sales and increasing customer interest in a
product or service. However, they may not necessarily lead to long-term customer loyalty, and can be costly
to implement. Therefore, businesses should carefully consider the costs and benefits of sales promotions
when incorporating them into their marketing mix.

Publicity and Public Relations

Publicity and public relations (PR) are related but distinct concepts.
Publicity is the act of getting media coverage or attention for a person, product, or organization. It typically
involves generating news stories, press releases, or other media content to promote a particular message or
image. Publicity can be positive or negative, and it can be earned (through media coverage) or paid (through
advertising).

Public relations, on the other hand, is a broader, ongoing effort to build and maintain relationships between
an organization and its various stakeholders, including customers, employees, investors, and the public at
large. PR involves activities such as creating and disseminating messaging, managing media relations,
organizing events, and crisis management. The goal of public relations is to create a positive image for the
organization and establish trust and goodwill with its stakeholders.

Publicity and public relations have different goals as a result of their methods and scope. Publicity seeks to
communicate all types of information about a company, brand or individual, with the goal of creating public
awareness. Public relations has the goal of drawing attention to specific aspects of the brand.

In summary, publicity is a specific tactic used within the larger practice of public relations. While both are
concerned with managing an organization's image and reputation, public relations is a broader, more
strategic approach to building relationships with stakeholders, while publicity is a more tactical approach to
generating media coverage.

Determining Advertising Budget

Determining an advertising budget can be a challenging task as it depends on several factors such as
business objectives, target audience, media channels, competition, and available resources. Here are some
steps that can help you determine your advertising budget:

1. Set business objectives: Determine what you want to achieve through advertising, such as increased
brand awareness, lead generation, or sales growth.
2. Identify your target audience: Determine who your ideal customers are and where they are most
likely to engage with your advertising.
3. Research media channels: Explore the available media channels such as print, digital, social media,
TV, radio, and outdoor advertising. Identify which channels are most effective for reaching your
target audience.
4. Analyze your competition: Determine how much your competitors are spending on advertising and
what channels they are using. This will give you an idea of what you need to invest to stay
competitive.
5. Determine your reach and frequency: Calculate how often and how many people you want to
reach with your advertising messages.
6. Allocate your budget: Based on the above factors, allocate your advertising budget to the most
effective channels for reaching your target audience.
7. Measure and adjust: Once you have executed your advertising campaign, track your results and
adjust your budget accordingly.
It is important to note that advertising budgets should not be set in stone and may require adjustments based
on changes in the market, customer behavior, or business goals. Regular review and optimization of your
advertising spend is critical to maximizing your return on investment.

Advertising Budget Methods

The most common methods are discussed as follows:

 Percentage of Sales: Under this method, the advertising budget is set as a percentage of either the
past sale or expected future sales. Small businesses usually use this method.
 Competitive Parity: This method advocates that a company sets an advertising budget similar to the
one set up by its competitor to yield similar results.
 Objective and Task: This method is based on the advertising objectives of this method. Once the
objectives are decided, the cost is estimated to complete those objectives, and accordingly, a
marketing budget is set.
 Market Share: In this method, the advertising budget is based on a company’s market share. For a
higher market share, less marketing budget is set.
 All available Funds: This is a very aggressive method under which all available profits are
allocated towards advertising activities. This method can be used by start-up businesses that need
advertisements to attract customers.
  Unit Sales: Under this method, the advertisement cost per article is calculated and based on the total
number of articles, it is set.
 Affordable: As the name suggests, the company sets its budget based on how much it can afford.
Advertising Copy Designing and Testing

An advertising copy is a term used to describe the main text used in the advertisement. The text could be a
dialogue, a catchy punch line or a company’s dictum.

It is a print, radio or TV advertising message that aims at developing and retaining an interest of the target
customer and prompting him to purchase the product within a couple of seconds.

Advertising Copy-testing is a comprehensive approach used as part of marketing research to test the
effectiveness of an advertisement based on responses prior to it being aired. This form of pre-testing will be
beneficial for the company to understand whether an advertisement carries a strong-enough message.

Advertising copy designing and testing are critical components of any successful advertising campaign. Here
are some steps that can help you design and test effective ad copy:

1. Understand your target audience: Develop a deep understanding of your target audience's needs,
preferences, and behaviors to create messages that resonate with them.
2. Identify your unique selling proposition: Determine what sets your product or service apart from
the competition and highlight it in your ad copy.
3. Create a compelling headline: Craft a headline that captures the attention of your target audience
and encourages them to keep reading.
4. Focus on benefits: Highlight the benefits of your product or service, rather than just its features.
5. Use persuasive language: Use persuasive language to convince your audience to take the desired
action, whether that is to make a purchase, request more information, or sign up for a newsletter.
6. Test your ad copy: Test your ad copy with a small sample of your target audience to determine its
effectiveness. You can use tools such as A/B testing or focus groups to get feedback on your ad copy.
7. Optimize your ad copy: Based on the results of your testing, make any necessary changes to your ad
copy to improve its effectiveness.
8. Continuously monitor and refine: Monitor the performance of your ad copy over time and make
adjustments as needed to ensure that it continues to deliver the desired results.
Effective advertising copy should be clear, concise, and compelling. By following these steps, you can
design and test ad copy that resonates with your target audience and drives the desired actions.

Media selection

Media selection is finding the most cost-effective media to deliver the desired number and type of exposure
to the target audience.
For an effective media selection, a firm must take the following factors into consideration:

 Budget: A firm with a limited budget for promotion and advertising needs to limit the coverage
amount a specific media will provide. It should keep a balance between its budget and the coverage
amount.
 Objectives of the Campaign: The campaign’s objectives are one of the factors that will affect the
budget and the amount of coverage. If the campaign objective is raising the firm’s brand awareness
among the youth market, then it will affect any decision the firm makes above. In this case, the firm
needs to spend more on specific publications to meet the objectives.
 Target Audience: The media the firm selects is certainly influenced by its target audience. The firm
needs to select the media that its target audience is related to such as the newspapers or magazines,
they read or the social media sites they use.
 Concentration: The firm’s campaign message’s concentration or focus should also be considered
whether it should be emotional or clear cut.
 Media’s Readership: Readership means the number of times readers have read the publication.
 Media’s Circulation: A firm needs to calculate the total circulation of the chosen media.
 Timing: The firm will also consider when it wants to start the promotional campaign while media
selection.
Media selection is an important part of any advertising campaign. Choosing the right media channels to
reach your target audience can greatly increase the effectiveness of your advertising efforts. Here are some
steps to help you select the appropriate media channels:

 Understand your target audience: Determine who your ideal customers are and where they are
most likely to be reached. This will help you choose the media channels that will be most effective in
reaching them.
 Research available media channels: Identify the different types of media channels that are available
to you, including traditional channels like TV, radio, and print, as well as digital channels like social
media, search engines, and mobile apps.
 Consider your budget: Determine how much you can afford to spend on advertising and how much
each media channel will cost. This will help you narrow down your options to those that are most
cost-effective.
 Evaluate the effectiveness of each media channel: Consider the reach, frequency, and engagement
potential of each media channel, as well as its ability to target your specific audience. This will help
you determine which channels are most likely to deliver the desired results.
 Test and refine: Once you have selected your media channels, test your advertising messages to see
how they perform. Use data and analytics to monitor the effectiveness of each channel and make
adjustments as needed to improve your results.
It is important to note that different media channels work better for different types of businesses and
advertising goals. Be sure to tailor your media selection to your unique situation and adjust your strategy as
needed to maximize your results.

Advertising effectiveness
Advertising effectiveness is a method used to determine if a brand's marketing efforts are hitting the mark
with its target audience and whether it's getting the best returns. It enables brands to measure the strengths,
weaknesses, and ROI of specific advertising campaigns, so the company can adjust accordingly.

Advertising effectiveness refers to the extent to which an advertising campaign achieves its intended goals,
such as increasing brand awareness, generating leads, or driving sales. Here are some ways to measure
advertising effectiveness:

1. Awareness: Advertising can be effective in increasing brand awareness. Measuring advertising

effectiveness can include metrics such as brand recognition, recall, and top-of-mind awareness.
2. Engagement: Advertising can generate engagement among consumers, such as social media likes,
comments, shares, or website visits. Metrics such as click-through rates and engagement rates can
help measure advertising effectiveness in terms of engagement.
3. Conversions: Advertising is often used to drive conversions, such as product purchases, email sign-
ups, or app downloads. Metrics such as conversion rates, cost per acquisition, or return on investment
(ROI) can help measure advertising effectiveness in terms of conversions.
4. Brand perception: Advertising can also affect how consumers perceive a brand. Surveys or focus
groups can be used to measure advertising effectiveness in terms of brand perception.
5. Customer loyalty: Advertising can be effective in building customer loyalty. Metrics such as
customer lifetime value or repeat purchases can help measure advertising effectiveness in terms of
customer loyalty.
To measure advertising effectiveness, it's important to set clear objectives and use appropriate metrics to
evaluate the impact of the campaign. It's also important to track the results over time to identify trends and
make necessary adjustments to the advertising strategy.

Sales Promotion – Tools and Techniques

Sales promotion refers to the use of various marketing techniques to encourage customers to make a
purchase or take a specific action. Here are some common sales promotion tools and techniques:

1. Discounts and coupons: Offering discounts or coupons can be an effective way to entice customers
to make a purchase. This can include percentage-off discounts, buy-one-get-one-free offers, or free
shipping promotions.
2. Rebates: Rebates offer customers the opportunity to receive money back after making a purchase.
This can be a powerful incentive for customers who are looking to save money.
3. Samples: Offering free samples is a great way to introduce customers to a new product. This can be
particularly effective for products that are not well-known or that are difficult to understand.
4. Contests and sweepstakes: Contests and sweepstakes can be used to generate excitement and
engagement around a product or service. This can include prizes for customers who share social
media posts or complete a specific action.
5. Loyalty programs: Loyalty programs offer rewards to customers who make repeat purchases. This
can include discounts, free products, or exclusive access to sales or events.
 6. Bundling: Bundling is the practice of offering multiple products or services together for a discounted
price. This can be a powerful incentive for customers who are looking for a deal.
7. Point of sale displays: Point of sale displays can be used to promote a specific product or service at
the location where customers make a purchase. This can include eye-catching displays or signage
that highlights the benefits of the product.
These sales promotion tools and techniques can be used in a variety of ways to increase sales, generate
excitement around a product, and build customer loyalty. It's important to choose the right tools for your
specific situation and to track the results to determine which techniques are most effective for your business.

MODULE 5

Marketing Research

Marketing research is the process of gathering, analyzing, and interpreting information about a market,
product, or service in order to make informed business decisions. The goal of marketing research is to
understand the needs and preferences of customers, identify market trends, and evaluate the effectiveness of
marketing strategies.

There are two main types of marketing research: primary research and secondary research. Primary
research involves gathering new data directly from customers through methods such as surveys, interviews,
and focus groups. Secondary research involves analyzing existing data from sources such as market reports,
government statistics, and academic studies.

Marketing research can provide businesses with valuable insights into their target audience and help them
make informed decisions about product development, pricing, promotion, and distribution. By understanding
consumer behaviour and preferences, businesses can develop more effective marketing strategies and
improve their overall competitiveness in the marketplace.

Meaning and Scope of Marketing Research

Marketing research is the process of gathering, analyzing, and interpreting data related to marketing
activities, customers, and the marketplace. It involves collecting data on consumer behavior, market trends,
competitor activities, and other relevant factors that can help businesses make informed decisions about their
marketing strategies.

The scope of marketing research can vary depending on the specific objectives of the research project. Some
of the key areas that marketing research can cover include:
 1. Product research: This involves gathering data on customer needs and preferences, evaluating
product features and benefits, and identifying opportunities for product development.
2. Pricing research: This involves analyzing consumer attitudes towards pricing, evaluating price
elasticity, and identifying optimal pricing strategies.
3. Promotion research: This involves assessing the effectiveness of advertising and promotional
campaigns, identifying target audiences, and evaluating the impact of marketing messages on
consumer behaviour.
4. Distribution research: This involves gathering data on distribution channels, evaluating the
effectiveness of existing channels, and identifying opportunities for expansion or improvement.
5. Customer satisfaction research: This involves gathering feedback from customers on their level of
satisfaction with products and services, identifying areas for improvement, and monitoring customer
loyalty and retention.
Overall, marketing research plays a crucial role in helping businesses make informed decisions about their
marketing activities and improving their competitiveness in the marketplace. By understanding consumer
needs and preferences, businesses can develop more effective marketing strategies, improve customer
satisfaction, and ultimately increase profitability.

Marketing Research Process

The marketing research process involves several key steps that help businesses gather and analyze data
related to their marketing activities. These steps include:

1. Defining the problem: This involves identifying the specific research question or problem that the
business wants to address. This step helps to ensure that the research project is focused and relevant
to the business objectives.
2. Developing the research plan: This involves determining the research design, data collection
methods, and sampling strategy. The research plan outlines the specific steps that will be taken to
collect and analyze data.
3. Collecting data: This involves gathering data using various methods such as surveys, focus groups,
interviews, and observations. This step may also involve collecting data from secondary sources such
as market reports and academic studies.
4. Analyzing data: This involves processing and analyzing the data to identify patterns, trends, and
relationships. This step may involve statistical analysis, data visualization, and other techniques to
help interpret the results.
5. Reporting findings: This involves communicating the results of the research to stakeholders in a
clear and concise manner. This step may involve creating reports, presentations, or other materials
that summarize the research findings and provide actionable insights for the business.
6. Taking action: This involves using the research findings to make informed business decisions. This
step may involve developing marketing strategies, launching new products, or making other changes
to the business based on the insights gained from the research.
Overall, the marketing research process is a systematic approach to gathering and analyzing data that can
help businesses make informed decisions about their marketing activities. By following these steps,
businesses can gain valuable insights into their target audience and improve their competitiveness in the
marketplace.

Marketing Organization and Control

Marketing Organization: Marketing organization is the framework for planning and making marketing
decision that are essential to marketing success. It is the vehicle for making decision on all marketing areas
such as product, price, place and promotion. Marketing organization is a group of marketing persons
working together towards the attainment of certain common objectives. Marketing organization provides a
system of relationships among various marketing functions to be performed by coordinating among
marketing people.

Need for the organization: to be competitive in the market where consumer is the king, we need to satisfy
the consumer. So, a good marketing organization is required to satisfy the customers. Marketing
organization is the pillar for success for many organizations and provides a framework for the following:

a. Divide and fix authority among the sub ordinates

b. To locate responsibility
c. To establish sales routines
d. To enforce proper supervision of sales force
e. To avoid repetitive duties
f. To enable the top executives to devote more time for planning policy matters
FACTORS AFFECTING MARKETING ORGANIZATION

Factors influencing marketing org can be categorized into internal and external factors.

Internal:

1. Top Management Philosophy: Organizational planning and its working is greatly influenced by
philosophy which can be good or bad. E.g.: Centralization Vs Decentralization
2. Product policy: the width of product line of an org determines its size as the product offerings
becomes increasingly diverse. E.g.: There could be a need to move away from straight functional
approach to product group approach.
3. People: The size of the organization is not an important factor in terms of number of people but it is
important with respect to human values which are critical and correct decisions regarding people
cannot be made unless taking into consideration

 Number  Personality
 Qualifications  Attitude
 Capabilities  Fear
  Suspicion  Ambition
External Factors:

1. Business Environment: With regards to business environment three points are important.

 The type of environment in which the firm is operating in terms of operations and size.
 The Nature of particular requirement for success in a given business which again determines the size.
 The rate of change in industries being served which again decides on its size and working.
2. Markets: This is the factor which again affects the marketing organization i.e., one should note
about its

a. Size c. Nature
b. Scope d. Location

Based on the above aspects we need to design the size of the organization.

3. Consumer requirements and expectations: Consumers have their own set of requirements and
expectations from the organization. The more varied and vivid services they expect that the usual
requirements. as a marketer we need to increase the workload depending upon the consumer
requirements and expectations
4. Channels of distribution: It is the type of channel of distribution which a marketing firm selects
based on its size. E.g., In case the company opts for indirect channel or channels it depends on
outside sales force and hence the organization gets thinner. When the organization selects direct
channel, its size is increased as it has its own sales force.

TYPES OF MARKETING ORGANIZATION STRUCTURES

Types of marketing organization structures: The marketing organization of a business can be structured on
any of the following basis:

a. Line and staff organization

b. Functional Organization
c. Product oriented marketing organization
d. Customer oriented marketing organization
e. Geography oriented marketing organization
f. Matrix form / Combined base
1. Line and Staff Organization: In most business forms especially medium size the marketing job is
structured around few line functions and few staff functions i.e. Major staff functions is organized into
separate department and the line function is responsible for sales department. The required coordination
between the line and staff function is managed by the executive at higher level.
Merits:

1. Provides expert advice from specialists

2. Relives line executes of routine, specialize functions
3. Enables young sales executive to acquire expertise
4. Helps in achieving effective coordination
5. Easy to operate
6. Less Expensive
Demerits:

1. Produce confusions arriving from indeterminate authority relationships

2. Curbs the authority of experts
3. Too much is expected from executives
4. Decision making is taken by top management

2. Functional: Under the organization the departments are created on the basis of specified functions to be
performed i.e. The Activities related to marketing, distribution etc

Merits:

1. Division of work base on specialization

2. Relives line executives of routine and specialized functions
3. Promotes application of expert knowledge
4. Helps to increase overall efficiency
Demerits:

1. Leads to complex relationships

2. Makes coordination ineffective
3. Promotes centralization
4. Lack of proper coordination
5. Delay in taking decisions
3. Product Oriented Marketing Organization: Organizations that produce wide variety of products often
organize marketing, training and promotion with respect to a product.

Merits:

1. The salesmen can render better customer service as they possess good knowledge of product and
may have close contacts with customers.
2. It makes individual departments responsible for the promotion of specific products.
3. It facilitates effective coordination
Demerits:

 It increases the employment of a number of managerial personal

 Many salesmen of same enterprise attend same customer each representing a separate product which
creates confusion in the minds of the customer.
  There may be duplication of activities
4. Customer Oriented Marketing Organization: When the departmentation of sales organization is done on
customer basis it is called customer oriented marketing organization. Deparmtnetation by customer may be
done in enterprise engaged in providing specialized services to different classes of customers.

Merits:

 It takes into account needs of each class of customers.

 IT provides specialization among the enterprise staff
Demerits:

 It makes coordination difficult

 It may lead to under utilization of resources in same department
 There may be duplication of activities
 These types of sales organizations are not suitable for small enterprises.
5. Geography/Territory: In a territory-oriented marketing organization, the responsibilities for marketing of
various products rests almost entirely with line executives. The territory managers are given varying
nomenclatures like depot manager, district manager, area manager, zonal manager, divisional manager etc.

Merits:

 It leads to economy in terms of times and money

 It helps in taking knowledge of local customers
 It helps in effective control
Demerits:

 It requires employment of number of managerial personnel.

 It dilutes control from head quarters
Marketing Control:

Marketing control is concerned with analyzing the performance of marketing decision, identifying the
problem/opportunities and taking actions to take advantage of opportunities and resolving problems. It is the
sequel to marketing planning. All manager need to exercise control over their decision and marketing
operations. Specifically marketing performance is measured in terms of market share, sales, profits. Hence
most control measures are designed with these parameters in mind. But today's marketing needs to measure
the following.

a. Market share
b. Sales and profits
c. Marketing effectiveness
d. Customer satisfaction
e. Customer perception of the firms and its brands
There are four types of controls with different objectives and tools and exist with different levels of
management.

1. Annual plan control: It is with top or middle level mgmt. to evaluate actual performance with
targeted to analyze differences or gaps. The tools used are sales analysis, market share analysis, sales
and expense ratios, and financial analysis.
2. Profitability control: It is used by marketing department to examine profitability by product,
territory, customer segment and trade channel.
3. Efficiency control: It is used to assess the effectiveness of money spends on sales force, advertising,
sales promotion and distribution. It is used by both line and staff executives.
4. Strategic control: It is used by the top mgmt. to examine whether the firm and marketing capable to
cope with environment or not. The major tool used here is marketing audit.

Marketing Control Process:

Marketing Control Process includes monitoring, evaluating and improving the performance in each activity.
There are six steps in this

1. Decide the aspect of marketing operation to be evaluated:

The first step is deciding about the marketing operation to evaluate.

E.g.: effectiveness of media for product advertisement, sales person performance, or performance of
company product

2. Establish measurement criterion

In this stage performance standards are decided against which actual performance is evaluated.

e.g.: control sales person performance, in this one can measure new accounts obtained, call frequency ratio
and order per call

3. Establishing monitoring mechanism

After setting the standards, the next step is to develop monitoring mechanism tools like marketing
information system (MIS). MIS is used to record performance of all marketing areas like monthly sales
volume for products.

4. Compare actual results with standards of performance

In this stage, results obtained through monitoring process are compared with pre-established standards of
performance.
 5. Analyze performance improvement

If the results/performance are not up to the desired standards, a corrective action is to be taken to enhance the
performance levels. For this performance improvement analysis is to be done.

Organizing and Controlling Marketing Operations

Organizing and controlling marketing operations involve several key steps to ensure that the company's
marketing efforts are aligned with its overall business objectives and strategies. Here are some important
steps to consider:

1. Define the marketing objectives: Clearly define the marketing objectives that align with the overall
business objectives. This will help ensure that the marketing efforts are focused on achieving specific
goals.
2. Develop a marketing plan: Develop a comprehensive marketing plan that outlines the marketing
objectives, strategies, tactics, budget, and metrics for the company. This plan should be aligned with
the overall business strategy and should be updated regularly.
3. Organize the marketing team: Organize the marketing team in a way that enables effective
communication, collaboration, and decision-making. This may involve creating cross-functional
teams or assigning specific roles and responsibilities.
4. Allocate the marketing budget: Allocate the marketing budget based on the marketing plan and the
expected outcomes. The budget should be monitored and adjusted as necessary to ensure that it is
being used effectively.
5. Monitor marketing metrics: Track and monitor key marketing metrics, such as customer
acquisition cost, customer lifetime value, return on investment, and customer satisfaction. This will
help evaluate the effectiveness of the marketing efforts and identify areas for improvement.
6. Evaluate marketing performance: Evaluate the performance of the marketing efforts based on the
metrics tracked. This evaluation should be conducted regularly to ensure that the marketing plan is
on track to achieve its objectives.
7. Adjust the marketing plan: Based on the evaluation, adjust the marketing plan as needed to
optimize the marketing efforts and improve their effectiveness.
By following these steps, companies can organize and control their marketing operations effectively, which
will help them achieve their marketing goals and drive business growth.
 MODULE 6

Issues and Developments in Marketing

Social, Ethical and Legal Aspects of Marketing

Marketing is a crucial aspect of any business as it helps organizations promote their products or services to
customers. However, in addition to the commercial benefits, marketing also raises social, ethical, and legal
issues that organizations must consider to ensure that their marketing practices align with societal
expectations and legal requirements.

Here are some examples of social, ethical, and legal aspects of marketing:

Social aspects:

 Diversity and inclusion: Companies need to ensure that their marketing messages do not perpetuate
stereotypes or discriminate against individuals based on their race, gender, ethnicity, religion, or
other characteristics.
 Environmental impact: Marketers should consider the environmental impact of their products and
services and communicate any eco-friendly features to customers.
 Health and safety: Marketers need to ensure that their products do not harm consumers' health and
safety, and that they provide accurate information about product risks and benefits.
Ethical aspects:

 Truth in advertising: Marketers must ensure that their advertising is truthful, accurate, and not
misleading.
 Privacy: Marketers should respect consumers' privacy and only collect personal information when it
is necessary and with their consent.
 Fairness: Marketers should ensure that their advertising is fair and does not unfairly target
vulnerable groups or exploit consumers' emotions.
Legal aspects:
  Intellectual property: Marketers should ensure that their advertising does not infringe on the
intellectual property rights of others, such as trademarks, copyrights, or patents.
 Consumer protection: Marketers must comply with laws and regulations related to consumer
protection, such as advertising standards, data protection, and fair-trading practices.
 Antitrust laws: Marketers should ensure that their advertising and business practices do not violate
antitrust laws, such as monopolistic or anti-competitive behaviour.
In conclusion, social, ethical, and legal aspects of marketing are crucial to ensure that marketing practices
align with societal expectations, ethical standards, and legal requirements. Companies that integrate these
aspects into their marketing strategies can build trust with their customers, create positive social impact, and
avoid legal consequences.

Marketing of Services

Marketing of services is the process of promoting and selling intangible products that include a wide range
of industries such as healthcare, finance, hospitality, education, and professional services. Marketing of
services differs from marketing of goods because the latter involves tangible products that can be seen,
touched, and evaluated by the customer.

Here are some key aspects to consider in marketing of services:

1. Understand the service: The first step in marketing a service is to understand what the service is and
how it adds value to customers. Services are intangible and involve an experience, so it is important
to understand what the customer perceives as value.
2. Segment the market: Identify the target market for the service and segment it based on the needs
and preferences of the customers. This will help in developing a more focused marketing strategy.
3. Develop a service strategy: Develop a strategy that outlines how the service will be delivered to the
target market. This includes the service delivery process, pricing strategy, communication channels,
and distribution strategy.
4. Create a service brand: Create a strong brand for the service that communicates its unique value
proposition to the customers. A strong brand will help differentiate the service from competitors and
build customer loyalty.
5. Promote the service: Promote the service through various channels such as advertising, public
relations, direct marketing, social media, and other digital channels. The promotional activities
should be aligned with the service strategy and brand messaging.
6. Manage the customer experience: Manage the customer experience by ensuring that the service
delivery process meets the expectations of the customers. This includes delivering the service with a
high level of quality, responding to customer feedback, and continuously improving the service.
7. Measure the effectiveness of the marketing: Measure the effectiveness of the marketing efforts by
tracking key metrics such as customer acquisition, customer retention, revenue growth, and customer
satisfaction. This will help in evaluating the success of the marketing strategy and making necessary
adjustments.
In summary, marketing of services requires a different approach than marketing of goods because services
are intangible and involve an experience. By understanding the service, segmenting the market, developing a
service strategy, creating a strong brand, promoting the service, managing the customer experience, and
measuring the effectiveness of the marketing, companies can effectively market their services and achieve
business growth.

International Marketing

International marketing refers to the process of promoting and selling products or services in foreign
countries. It involves understanding the different cultural, economic, legal, and political factors that affect
the marketing activities in different countries. International marketing can be challenging due to the
differences in language, culture, and business practices in different countries.

Here are some key aspects to consider in international marketing:

1. Market research: Conduct extensive market research to understand the cultural, economic, legal,
and political factors that affect the marketing activities in different countries. This will help in
identifying the target markets, understanding the needs and preferences of the customers, and
developing effective marketing strategies.
2. Adaptation of the marketing mix: Adapt the marketing mix (product, price, promotion, and place)
to meet the needs of the target market in different countries. This may involve developing new
products or services, adjusting the pricing strategy, using different communication channels, and
adapting the distribution strategy.
3. Compliance with local laws and regulations: Ensure compliance with local laws and regulations in
different countries. This includes intellectual property laws, advertising regulations, data privacy
laws, and other legal requirements.
4. Understanding cultural differences: Understand the cultural differences in different countries and
adapt the marketing messages and communication channels accordingly. This may involve using
different language, imagery, and symbolism to communicate effectively with the target market.
5. Partnership and collaboration: Establish partnerships and collaborations with local companies and
organizations to gain local knowledge, build relationships, and develop a better understanding of the
local market.
6. International branding: Develop a strong international brand that is recognizable and memorable
across different countries. This will help in building brand awareness and loyalty among the
customers in different countries.
7. Continuous evaluation and improvement: Continuously evaluate the effectiveness of the
international marketing strategy and make necessary adjustments to optimize the marketing activities
and achieve business growth.
In summary, international marketing requires a different approach than domestic marketing due to the
cultural, economic, legal, and political differences in different countries. By conducting extensive market
research, adapting the marketing mix, complying with local laws and regulations, understanding cultural
differences, establishing partnerships and collaborations, developing a strong international brand, and
continuously evaluating and improving the marketing strategy, companies can effectively market their
products or services in foreign countries and achieve business growth.

Green Marketing

Green marketing is a type of marketing that focuses on promoting products or services that are
environmentally friendly or sustainable. Green marketing is becoming increasingly important as more
consumers become aware of environmental issues and demand more eco-friendly products and services.

Here are some key aspects to consider in green marketing:

1. Product design: Develop products or services that are environmentally friendly or sustainable. This
may involve using eco-friendly materials, reducing energy consumption, or minimizing waste.
2. Packaging: Use eco-friendly packaging materials and reduce packaging waste. This can help to
reduce the environmental impact of the product.
3. Communication: Communicate the eco-friendliness of the product or service effectively to the
target market. This may involve using labels or certifications that indicate the product's
environmental credentials, or using advertising campaigns that emphasize the product's
sustainability.
4. Pricing: Price the product or service in a way that reflects its environmental credentials. Consumers
may be willing to pay a premium for eco-friendly products, but the pricing should be in line with the
product's value proposition.
5. Distribution: Consider the environmental impact of the distribution channels used to deliver the
product or service. This may involve using more eco-friendly shipping methods or reducing
transportation emissions.
6. Collaboration: Work with suppliers, distributors, and other stakeholders to promote eco-friendly
practices and develop more sustainable products or services.
7. Transparency: Be transparent about the environmental impact of the product or service. This can
help to build trust with consumers and demonstrate a commitment to sustainability.
In summary, green marketing involves promoting products or services that are environmentally friendly or
sustainable. By focusing on product design, packaging, communication, pricing, distribution, collaboration,
and transparency, companies can effectively market their eco-friendly products or services and appeal to
environmentally conscious consumers.

Cyber Marketing

Cyber marketing, also known as digital marketing, is a type of marketing that uses digital channels to
promote products or services to target audiences. It involves leveraging various online and digital
technologies such as social media, search engines, email, mobile applications, and websites to reach
potential customers.
Here are some key aspects to consider in cyber marketing:

1. Social media marketing: Use social media platforms such as Facebook, Twitter, and LinkedIn to
promote products or services and engage with customers.
2. Search engine optimization (SEO): Optimize website content and structure to rank higher in search
engine results and increase visibility to potential customers.
3. Email marketing: Use email campaigns to reach customers and promote products or services.
4. Content marketing: Develop valuable and engaging content such as blogs, videos, and infographics
to attract potential customers and build brand awareness.
5. Mobile marketing: Optimize marketing campaigns for mobile devices such as smartphones and
tablets to reach customers on-the-go.
6. Pay-per-click (PPC) advertising: Use targeted advertising campaigns to reach potential customers
through search engines and social media platforms.
7. Analytics and metrics: Use analytics and metrics to track and measure the effectiveness of
marketing campaigns and make data-driven decisions.
In summary, cyber marketing is an essential aspect of modern marketing strategies as consumers
increasingly spend time online and rely on digital technologies to make purchase decisions. By leveraging
social media, SEO, email, content marketing, mobile marketing, PPC advertising, and analytics, companies
can effectively market their products or services and reach their target audiences in a cost-effective and
measurable way.

Relationship Marketing

Relationship marketing is a type of marketing that focuses on building and maintaining long-term
relationships with customers. It is based on the idea that long-term relationships with customers are more
valuable than short-term transactions, and that customers who have positive experiences with a brand are
more likely to become loyal, repeat customers and advocates for the brand.

Here are some key aspects to consider in relationship marketing:

1. Customer satisfaction: Focus on customer satisfaction and deliver a high-quality customer

experience. This may involve personalized communication, providing excellent customer service,
and offering value-added services.
2. Customer retention: Retain customers by providing ongoing support, offering loyalty programs, and
providing incentives for repeat business.
3. Relationship building: Build relationships with customers by engaging with them on social media,
responding to customer feedback and reviews, and providing personalized recommendations.
4. Data analysis: Use data analysis to understand customer behavior and preferences, and use this
information to tailor marketing efforts and improve the customer experience.
 5. Brand advocacy: Encourage customers to become brand advocates by providing exceptional service
and experiences, and incentivizing them to share their positive experiences with others.
6. Cross-selling and upselling: Offer complementary products or services and incentivize customers to
purchase more from the brand.
7. Continuous improvement: Continuously improve the customer experience by collecting feedback,
measuring customer satisfaction, and making changes to address areas of improvement.
In summary, relationship marketing involves building long-term relationships with customers by focusing on
customer satisfaction, retention, relationship building, data analysis, brand advocacy, cross-selling and
upselling, and continuous improvement. By prioritizing customer relationships, companies can create a loyal
customer base and increase customer lifetime value, leading to sustainable business growth.

Recent Developments of Marketing

Marketing is constantly evolving and changing, driven by technological advancements, shifting consumer
behavior, and changing market dynamics. Here are some recent developments in marketing:

1. Personalization: Personalization has become increasingly important in marketing, with brands using
data and analytics to provide personalized experiences and content to consumers. This includes
personalized product recommendations, targeted advertising, and tailored email campaigns.
2. Artificial intelligence (AI): AI is transforming the marketing landscape, enabling brands to analyze
large amounts of data, automate processes, and provide personalized experiences to consumers. AI is
being used in areas such as chatbots, voice assistants, and predictive analytics.
3. Influencer marketing: Influencer marketing has become a popular marketing strategy, with brands
partnering with influencers to promote their products or services on social media. This approach can
help brands reach new audiences and build credibility with consumers.
4. Sustainability: Sustainability has become an important focus for many brands, with consumers
increasingly seeking eco-friendly and sustainable products. Brands are incorporating sustainability
into their marketing efforts, promoting their environmental credentials and using sustainable
materials and production methods.
5. Social media: social media continues to be a major marketing channel, with brands using platforms
such as Facebook, Instagram, and TikTok to reach and engage with audiences. Social media
algorithms and advertising tools have become more sophisticated, enabling brands to target specific
audiences with greater precision.
6. Customer experience: Customer experience has become a key differentiator for brands, with
companies investing in improving customer service, website usability, and product design to enhance
the overall customer experience.
7. Data privacy: Data privacy has become a major concern for consumers, and brands are increasingly
being held accountable for how they collect, store, and use customer data. Brands are implementing
stricter data privacy policies and being more transparent about their data practices.
In summary, marketing is constantly evolving, driven by changing consumer behaviour, technological
advancements, and market dynamics. Recent developments include personalization, AI, influencer
marketing, sustainability, social media, customer experience, and data privacy. Brands that stay ahead of
these trends can gain a competitive advantage and better engage with their target audiences.